FX Indices Review for 16/7/12

Another brief update as I've had to go away for the w/e.
USDX Charts:
USDX Monthly

USDX Weekly: note the indecision spinning top candle for last week

USDX Daily: note how price has bounced off and down from the 84 level.

USDX 4 Hr: note again the 84 level.

EURX Charts

EURX Monthly

EURX Weekly 

EURX Daily: note Friday's long tail Doji candle. This is an indication the bulls have taken control, for that day at least!

EURX 4HR 

Thoughts:

The USDX is struggling on its upward march as it has run into the major resistance in the 84 region.  This is the area of the:

• 200 EMA on the monthly chart at the 84.2 level. 
• 75% fib retrace level from the last swing high back in mid 2010 and, also, 
• the psychological whole number level of 84. 

I mentioned last week that I thought the USDX 84 level be the 'water mark' for market sentiment. This may be true if Friday was anything to go by! Global stock markets rallied sharply on Friday even though there was mixed market news. The 84 level is, again, the key level to watch this week. A break up, close and hold above this level 84 area could result in an extended period of 'risk off' trading. A failure to breach the 84 level could result in an extended period of 'risk on' currency trading and stock market gains.

I will look for 'risk on' trades if:

• the USDX holds below the 84 area. This is the area of the monthly 200 EMA, a major previous S/R level and the 75 % fib retrace from the last major swing high AND
•  the EURX turns bullish and especially if it can break back above the holds above 100 area. This is the area of the monthly pivot, the 4hr 200 EMA and a previous strong S/R level.

I will look for 'risk off' trades if:

• the USDX breaks above the 84 area AND
• if the EURX remains bearish.