Indices Analysis for Week 7/5/12

I have posted 2 reviews today, Saturday 05/05/12. My Indices Review and my Trading Week review for 7/5/12.  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.

USDX

Monthly: Trend up overall/turning sideways.  The current monthly candle, which is only a few days old, is bullish and engulfing.

Weekly:  Trend still bouncing sideways. Price broke lower in the previous week to find new support. Bull flag pattern still evolving here? Looks like it at the moment.

Daily:  Trend Ranging. 5 green candles in a row last week. Friday’s candle was very bullish after NFP news. Price is now trading more within a symmetrical triangle pattern. These patterns represent indecision and a break out can occur either up or down.

4hr: Trend Up.  Price bounced off the low support level to then rally for most of last week. Price broke out of the identified bullish descending wedge pattern and has now closed above the weekly and monthly pivots and 4hr 200 EMA and finished off at the 79.5 psychological level. Something to note: Price finished the week just under the 61.8% fib re-trace level from the last swing high (see extra 4 hr fib chart here).

Thoughts:  This paragraph is STILL relevant: We are STILL at key levels across the broader markets. The DOW is still just above the 78.6% breakout 13,000 level although the S&P slipped back below its key 1,400 breakout level after NFP. There is still the possibility for market sentiment to move in either direction from her. Current sentiment seems now to bearish and 'risk off'. I get that, but, there has been a tendency of late to turn bullish at the slightest hint of any good news so I will be vigilant with any 'risk off' trading.

I will look to LONG the USD in pairs on valid TS signals if price on the USDX keeps rising. I will watch closely though from this point on and up to the upper, bear descending wedge trend line. I have a 4hr TS to LONG on this index now.

I will look to SHORT the USD in pairs on valid TS signals and if price on the USDX breaks back down below the 4hr 200 EMA.

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. This chart is essentially the same as it was last week. Price is still trading within a large descending triangle pattern.  There is an extra, steeper, bear trend line in play as well. The current monthly candle is bearish. 

Weekly:  Trend sideways/down. Last week’s candle was a bearish candle. The descending triangle pattern, which is a bearish continuation pattern, is more evident from this chart.

Daily: Trend sideways/down. Price is still trading within the smaller of the two descending triangle patterns. Price broke down through the support level of 103 during the week.

4 hr: Trend down. Price had been trading in a narrow range for about 4 weeks. It has now broken down through the 103 support level and is heading toward the bottom triangle trend line at 100.60. There is little resistance in its path.

Thoughts:  I will look to SHORT the Eur in pairs on valid TS signals if the EURX stays below the 103 level.  I have a 4 hr TS signal to SHORT on this index now.

I will look to LONG the Eur in pairs on any new TS signal and if the EURX breaks closes and holds back above the 103 level.