USDX
Monthly: Trend ranging / upwards. I’m still seeing a possible
bearish ‘double top’ formation. The new monthly candle is printing a bearish
candle.
Weekly: Trend up/sideways. Price traded lower this week following
on from last week’s confirmed bearish ‘Dark Cloud Cover’ pattern. The weekly
candle closed as a bearish candle. The ‘neck line’ of the possible ‘Double Top’
pattern at 78.80 happens to be right on the 38.2% fib level of the most recent major
down move (2010-2011). This might be a possible target for any continued
bearish move with the USDX.
Daily: Trend choppy/down. Price chopped down for most of this week.
Price had held above the weekly 200 EMA for the last month but it broke down
through this support on Thursday and, although Friday’s candle closed as a Doji candle suggesting indecision, price still closed the week below this key S/R
level.
Daily Ichimoku Cloud chart: Price has again traded within the
Ichimoku Cloud for the entire week. That makes the best part of the last 3 weeks
that the USDX has traded within the resistance of the daily Cloud! There was a new bearish Tenkan/Kijun cross, of sorts as angles skewed, this week as well.
4hr: Trend choppy/down. Price chopped sideways this week, above the
support of the weekly 200 EMA, until Thursday. Euro strength after ECB news
seemed to push it lower though. It closed the week below the weekly 200 EMA,
even with positive NFP data.
4hr Ichimoku Cloud chart: Price tried to break up through the Cloud
early in the week but struggled with this and eventually closed the week out
below the Cloud. There was another new
bearish Tenkan/Kijun cross on the 4hr chart towards the end of the week as well.
This chart is not aligned with the daily chart though and suggests further
choppiness for the USD.
EURX
Monthly: Trend down overall. The most significant point to remember
here though is that price closed for November above the monthly 200 EMA. This was
the first monthly close above this huge S/R level for 2 ½ years! The new December
candle is bullish as well.
Monthly Ichimoku: Price had been held back by the monthly Cloud for
most of this year but is now attempting to push up through this resistance
zone.
Weekly: Trend up, overall. This
week’s candle was another bullish candle that has closed above the monthly 200
EMA. Price had failed to move above the monthly 200 EMA after several previous attempts
earlier throughout the year. There were two weekly candle closes above this key
S/R level recently followed by three closes below. We have now had three consecutive
weekly candles close above this significant level. There is a bit of a ‘double
top’ look to the weekly chart building though as price reaches levels attempted back
in October. A break above this 'double top' region would suggest that the next target might be the 61.8% fib at 113 if bullish momentum continues!
USDX: the USDX traded lower for the week following the confirmed bearish
‘Dark Cloud Cover’ pattern of the week before. The index has now also closed
below the support of the weekly 200 EMA and I’ll be watching next week for any
bearish follow through. Further bearish movement could see price move down to
test the ‘neck line’ of the ‘double top’ pattern again. It could also see price
emerge from the bottom of the daily Ichimoku Cloud. If so, this would put the
EURX and USDX back into ‘risk on’ alignment which might support the Santa Rally
many are speculating about.
EURX: the EURX traded higher this week. There have been recent
bullish crosses again on both the 4hr and daily Ichimoku charts. More
significantly, though, this index has continued to hold above the major S/R
level of the monthly 200 EMA. The November monthly candle close above this
major S/R level was the first in 2 ½ years and not something to ignore! I see
the EURX as a kind of ‘risk barometer’ and this bullish monthly candle close
above the monthly 200 EMA as quite significant. I believe that a continued hold
above this S/R level might help to support continued ‘risk appetite’.
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 or Middle East events 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.
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