FX Indices Review for 29/07/13

USDX

Monthly: Trend ranging / upwards. The current monthly candle is now printing a large bearish candle. Last month’s ‘pin bar’ reversal candle was ‘spot on’! The monthly 200 EMA and the 84 area continue to be resistance.

Weekly: Trend up overall. The weekly support trend line is still supporting price. The weekly candle closed as a large bearish candle. The bearish ‘double top’ evolved. Price closed the week sitting just under the major S/R level of 81.70. The weekly chart shows how significant this level has been.

Daily: Trend choppy. Price traded down this week and closed the week below the daily 200 EMA.

Daily Ichimoku Cloud chart: Price trended down and emerged below the Cloud on Thursday. It finished the week trading below the Cloud.

4hr: Trend down. Price drifted down all week.

4hr Ichimoku Cloud chart: Price traded below the Cloud all week. This is now aligned with the 4hr chart and suggests ‘risk off’ or short USD.

EURX

Monthly: Trend down overall but 9 of the last 12 months were bullish. The current monthly candle is printing a bullish candle.

Weekly: Trend up, overall. The weekly support trend line is still in place. Price failed to move above the monthly 200 EMA back in January. This level had been major resistance so it was no surprise that price had paused here. Price action had been quite parabolic for ‘risk on’ and subsequently pulled back to the mean of the support trend line. Price bounced off this major support level and has held up for the last 17 weeks. The weekly candle closed as a small, but bullish, candle. Price is sitting well above the 108.5 S/R level now. The significance of this 108.5 level can be seen if you cast your eyes across the weekly chart. Price really needs to make a clear break away from this area, either up or down, to enable a new momentum move to evolve. There is also still a possible bullish inverse Head and Shoulder’ pattern brewing here though. The neck line looks to be at around the 108.5 level so there would need to be a decisive close and hold above this level to enable it to fully evolve. Price looks like it might try and make another attempt at breaking up through the monthly 200 EMA though.

Daily: Trend ranging. Price has chopped upwards within the ascending trading channel this week.

Daily Ichimoku Cloud chart: Price chopped upwards above the Cloud all week.  The point to note here now though is that the Cloud below price is thinning and, thus, won’t offer as much support to future price action.

4 hr: Trend choppy & ranging. Price drifted upwards all week but failed to break through the upper trend line of the ascending trading channel.  

4hr Ichimoku Cloud chart: Price traded above the Cloud all week. This is in alignment with the daily chart and supports ‘risk on’.

Thoughts:

Choppy markets + Ichimoku: The Ichimoku charts shifted into ‘risk on’ alignment during the week. Previous alignment has often resulted in extended trending periods. I’ll be watching closely to see if this alignment holds and, if so, for new TS signals in line with this momentum. I'll also be looking for stock and stock Options to buy.

The EURX: The EURX is holding up above the Ichimoku Cloud which is bullish but needs to break and hold out of the trading channel, either up or down!, before any decent momentum can build. 

USDX: I’m still hoping to see this index either clear the 84 level or break the weekly support trend line. It’s in a bit of ‘no man’s land’ at the moment.

Note: The analysis provided above is based purely on technical analysis of the current chart set ups. As always, Fundamental style events, by way of any Euro zone based dramas and/or news announcements, continue to be unpredictable triggers for price movement on the indices.  These events will always have the potential to undermine any technical analysis.