FX Indices Review for 18/6/12

WARNING: I'm not sure whether ANY technical analysis is going to be worthwhile this weekend given the uncertainty with the Greek elections! Caution and good money management will be needed if trading into next week

USDX

Monthly: Ranging but currently in uptrend.  Price tested up to near the 200 EMA and has since retraced to test the 81.7 previous S/R level. There is almost a bearish ‘dark cloud cover’ pattern evident.

Weekly:  Trend up. Last week’s candle was an inverted hammer candle. These are viewed as bullish reversal patterns when they appear in a downtrend, as this one did.

Daily:  Trend Up/then down.  Price can be viewed as being in either a bullish ‘bull flag’ or a bullish ‘descending broadening wedge’ pattern.

4hr: Trend Up/Ranging. Price is ranging within the flag/wedge pattern. Price finished near the previous S/R level of 81.7 and just above the monthly pivot and 4 hr 200 EMA.

Thoughts:  Hopes of QE3 and Central Bank action following the Greek elections have been all that has fueled 'risk on' trading and a pull back in the USD. Further direction about risk appetite will be totally dependent upon the w/e election results and nest week’s G20 meeting announcements.

I will look to LONG the USD in pairs on valid TS signals and if price on the USDX breaks, closes and holds up out of the bull flag pattern. I will be cautious as price approaches the weekly pivot and 82.6 levels though.

I will look to SHORT the USD in pairs on valid TS signals and if price on the USDX breaks, closes and holds below the 4 hr 200 EMA and monthly pivot.

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 has re-tested the previously broken 100.5 level. The current new monthly candle is bullish.

Weekly:  Trend down/ranging.

Daily: Trend down. This chart is almost the inverse of the USDX and is forming either a bearish ‘Bear Flag’ pattern or bearish 'ascending broadening wedge' pattern.

4 hr: Trend ranging. Price failed to hold above the monthly pivot and former S/R level of 100.5 late last week.

Thoughts:  I will look to SHORT the Eur in pairs on new valid TS signals, if the EURX breaks, closes and holds out of the bear flag pattern.

I will look to LONG the Eur in pairs on any new TS signal, if ‘risk on’ sentiment returns and if price can break, close and hold above the 100.5, monthly pivot level and, then, the 4 hr 200 EMA level.