USDX
Monthly: Trend: up overall. The
current monthly candle looks to be forming a shooting star but, obviously, has yet to close. This could be read as a bearish signal given that this candle is
appearing after a recent run up of about 5 months.
Weekly: Trend: still bouncing
sideways. Price has broken down from trading within a symmetrical triangle.
Last week’s candle was a large bearish engulfing candle. This,
indeed, has followed on from the bearish ‘hanging man’ candle, pointed out the week before.
Daily: Trend: Ranging. Friday’s
candle was a large bearish engulfing candle after 3 indecision day candles.
Price has broken down from trading within a symmetrical triangle pattern.
4hr: Trend: Sideways/down. Price held around
79.50 for most of the week. Price broke out of the symmetrical triangle late on
Friday though. A TS signal to SHORT has developed on this index on the 4 hr chart.
Thoughts: We are STILL at key
levels across the broader markets. The DOW is back above the 78.6% breakout
13,000 level although the S&P is just below its key 1,400 breakout level. There
is still the possibility for market sentiment to move in either direction from
here, although the BULLS do seem to have a lot of persuasion at the moment.
The other point to note is that the
USD could simply bounce back up from these low levels. Look back at the daily
USDX chart and you will see that price did bounce up from the lows, and bottom
trend line, in Feb and March this year. There is also the saying ‘Sell in May
and go Away’ where there is a belief shared by many traders that market growth declines in this
period. A bounce back up in the US dollar could contribute to a fall in stock
prices and, thus, give weight to this phrase.
I will look to LONG the USD in
pairs on valid TS signals if price on the USDX reverses and bounces back up
from the bottom triangle trend line it has just breached.
I will look to SHORT the USD in
pairs on valid TS signals and if price HOLDS below the bottom triangle trend
line that is has just broken down from. I do have a TS signal to go SHORT on
this index already.
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. Price
is still trading within a large descending wedge pattern. There is an extra, steeper, bear trend line
in play as well. The current monthly candle is bearish, but less so than it
appeared last week.
Weekly: Trend: sideways. Last
week’s candle was a bullish engulfing candle after the ‘indecision’ Doji from
the week before.
Daily: Trend: sideways/turning up.
Price is still trading within the smaller of the two descending wedge
patterns. Price traded just above 103 all week; near the weekly pivot. Friday’s candle was bullish engulfing candle.
4 hr: Trend: ranging.
Price bounced sideways in a narrow range around the weekly pivot for
most of the week. Price is moving up
towards major resistance at the 4hr 200 EMA, monthly pivot S1 and psychological
104 level.
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, then, the 103 level.
I will look to LONG the Eur in
pairs on any new TS signal and if the EURX breaks closes and holds above the
104 level and 4 hr 200 EMA.
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