Indices Review for Week 2/4/2011

I have posted 2 reviews today, Saturday 31/3/12. My Indices Review and my Trading Week  Analysis.  Only one e-mail alert will be sent though most likely.  Please make sure that you read the Trading Week Analysis as well so that you understand what I am looking for in the pairs this week.

NB: much of the commentary is the same as for last week given that both indices ranged for much of last week and that price action on both is still constrained within symmetrical triangles.

USDX

Monthly: Trend up overall.  The March candle was bullish but has closed as an inverted hammer.  This could spell a reversal of the recent down move and, then, evolve into a bull flag pattern.  So I will be on the lookout for an upper trend line break here.

Weekly:  Trend up overall / sideways. Price is trading within a symmetrical triangle but, also, does look like it could still be forming a bull flag pattern, as mentioned last week and above.

 

Daily:  Sideways/Ranging.

4hr: Flat/down.  Price has fallen back into the narrow trading range where it was bound for many sessions some weeks ago; the 79.5 – 78.5 range.  Price seems bound by this upper trend line as well as by the weekly pivot and 4hr 200 EMA and, on the lower side, by the bull triangle trend line and monthly pivot. The DMI lines are both below 20 and the ADX is flat, revealing a lack of trend at the moment.

Thoughts:  

We are at critical levels in the broader markets and this will probably set the tone for currency trading this week.  I will keep a close eye on those developments when evaluating the indices and currencies for trades.

Both indices’ daily charts clearly show the narrow triangle patterns containing price.  The pattern for the EURX is still much tighter than for the USDX though. 

I will look to LONG the USD in pairs on valid TS signals and if price breaks, closes and holds above the 79.5 level, 4hr 200 EMA and weekly pivot. 

I will look to SHORT the USD in pairs on valid TS signals and if price keeps below the monthly pivot @79 and, then, breaks, closes and holds below the bottom triangle trend line.

As always, Fundamentals, by way of Euro zone dramas and news announcements, continue to be triggers for price movement on the indices.  These events can always have the potential to undermine all Technical analysis.

EURX

Monthly:  Trend down BUT has turned.  The March candle ended up forming an indecision ‘spinning top’ candle.  Join the club!

Weekly:  Trend still up overall. Last week’s candle was also a ‘spinning top’.

Daily: Trend up overall.  Price is trading within a symmetrical triangle pattern. 

4 hr: Trend sideways overall/bouncing.  Price is constrained to trading within the triangle pattern but was supported all week by the trend line, weekly pivot and 4hr 200 EMA. Price has also held above the monthly pivot @ 104.2. 

Thoughts:  

I will look to SHORT the Eur in pairs on valid TS signals if the EURX breaks, closes and holds below the weekly pivot and bottom triangle trend line.  The 4hr 200 EMA is not far below this level though.

I will look to LONG the Eur in pairs on valid TS signals and if the EURX continues to trend upwards, produces a new TS LONG signal and breaks above the upper trend line of the symmetrical triangle pattern. There is huge resistance to any up move though in the daily 200 EMA and the psychological 106 level.  The 106 level also represents the 61.8% fib retrace level from the Jan 2012 lows back up to the 2011 Oct high.