Indices Review for Week 28/5/12

I will post my Trading Week Analysis of my main currency pairs either later tonight or tomorrow. Remember, it is a holiday in the USA tomorrow and in parts of Europe. 

USDX

Monthly: Ranging but currently in an uptrend.  The current monthly candle is VERY bullish and engulfing. Price is approaching the 61.7% fib re-trace from the most recent low to the previous high. I’m not the only person on the planet that will be seeing this trading phenomenon near the 83 level. I would not be surprised to see some reaction or hesitation around this level. I would also expect that the monthly 200 EMA at the 84 level might give any continued up movement some grief too.

Weekly:  Trend up. Price broke through the previous high of 81.7.

Daily:  Trend Up.  Price has rallied for most of May. A new bull trend line is evident.

4hr: Trend Up. Price is doing impersonations of the Very Hungry Caterpillar! The previous resistance level of 81.7 might become new support. I’ll be watching for any pullbacks to possibly bounce back up from here. Failure of the 81.7 level to support price would be a rather bearish signal for me though.

Thoughts:  Euro zone news drove most of the trading action last week and may continue to do so again this week. It seems like a lot of the currency moves would love an excuse for a slight pullback but there is little sign of any good news needed for such a shift in momentum, even if only temporary.  Continued caution is required.

I will look to LONG the USD in pairs on valid TS signals if price on the USDX keeps rising and holds above the 81.7 level. I will look for signs of weakness though at the 83 and 84 levels as mentioned above.

I will look to SHORT the USD in pairs on valid TS signals and if price on the USDX moves back down below the 81.7 level and breaks, closes and holds below the bull 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. This chart is essentially the same as it has been for the last few weeks. Price has finally broken down through the 100.5 level and from trading within a large descending triangle pattern.  The current monthly candle is very bearish. Price is at new low levels now.

Weekly:  Trend down. Last week’s candle was very bearish.

Daily: Trend down. Friday’s candle was an ‘inverted hammer’ candle stick pattern though which is viewed as a sign of potential reversal. 

4 hr: Trend down.  Quite a few indecision candle stick patterns evident though at these significant low levels with Dojis and more ‘inverted hammers’.

Thoughts:  I will look to SHORT the Eur in pairs on valid TS signals if the EURX continues to trend down below the bottom, broken, triangle trend line value of 100.5/100.6 area.

I will look to LONG the Eur in pairs on any new TS signal and if the EURX can rally back up and break through the 100.5.