FX Indices Analysis for 06/08/12

USDX

Monthly: Ranging but currently in uptrend.  Price is still stuck under the monthly 200 EMA @ 84.17.

Weekly:  Trend up. 

Daily:  Trend up overall.  Friday was a strong ‘down’ day though with price closing below the weekly and monthly pivot. On the Ichimoku Cloud chart: Price is sitting just above the Cloud on the daily chart.

4hr: Ranging. I have a TS ‘short’ signal on the index on the 4 hr chart! On the Ichimoku Cloud chart:  Price has closed below the Cloud on the 4hr chart.

EURX

Monthly:  Trend down. The current new monthly candle is bullish.

Weekly:  Trend down. The last 2 weeks have been bullish though! 

Daily: Trend down. Friday was a strong up day though and price has just closed above the monthly pivot. On the Ichimoku Cloud chart:  There is a big Cloud in the way of price on the daily chart. Look back to April on this chart: 4 hr trend trading was awful for April and this occurred when price was stuck in the Cloud on the EURX daily chart. I will be on the lookout for this phenomenon again!

4 hr: Trend ranging. Price has closed above the weekly and monthly pivot but needs to get over the 4hr 200 EMA. I have a TS signal to ‘long’ this index on the 4hr chart. On the Ichimoku Cloud chart:  Price has closed above the Cloud on the 4 hr chart.

Thoughts:  

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, the weekly and monthly pivot and the 61.8 % fib retrace from the last major swing high AND if
•  the EURX remains bullish and holds above the 98 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 returns to being bullish and breaks back above the 83 area AND if
• the EURX reverts to being bearish and closes below the weekly 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.