FX Indices Review 30/7/12

Thoughts:

Well, the 84 level did turn out to be the ‘water mark’ level for the USDX this week. Market sentiment turned to ‘risk on’ late in the week after the ECB President’s comments. There are road blocks in the way of further ‘risk on’ movement though on both the USDX and the EURX though.  These will need to be watched closely in a week with lots of red flag news items!

Price on the USDX index is hovering just under the next, lower, key S/R level down of 82.65. This level is the 61.8 fib retrace level from the last swing high back in June 2010. Price is also just under the 4hr 200 EMA. The monthly pivot at 82.15 is then just below current price and could help to provide some support. Also, note on the daily chart of the Ichimoku how the ‘cloud’ is just current price and near the monthly pivot. This adds further to the weight of support at the 82.15 area. The USDX has closed below the cloud on the 4hr Ichimoku chart though. 

The EURX is ‘between a rock and a hard place’, currently trading between the weekly pivot and the 4hr 200 EMA. Price has closed above the Ichimoku Cloud on the 4 hr chart but not on the daily chart though.

I will look for 'risk on' trades if:

• the USDX holds below the 82.65 area. This is the area of the 4hr 200 EMA, a major previous S/R level and the 61.8 % fib retrace from the last major swing high AND
•  the EURX remains bullish and holds above the weekly pivot area. The EURX has the 4hr 200 EMA in its path though which could resist further upward price movement.

I will look for 'risk off' trades if:

• the USDX breaks back above the 82.65 area and the 4 hr 200 EMA AND
• if the EURX reverts to bearish and closes below the weekly pivot.

USDX Charts:

USDX Monthly

USDX Weekly: price action is still bullish on the weekly chart 

USDX Daily 

USDX Ichimoku Daily

USDX 4hr

USDX 4hr Ichimoku 

EURX Charts:
EURX Monthly

 EURX Weekly

EURX Daily

 EURX Daily Ichimoku

EURX 4hr

EURX 4hr Ichimoku