FX Indices Review for 10/02/14

USDX

Monthly: Trend ranging / upwards. I’m still seeing a possible bearish ‘double top’ formation. The new monthly candle is currently printing a bearish coloured ‘inside’ candle.

Monthly Ichimoku: The February candle is trading above the monthly Cloud.

Weekly: Trend chopping/sideways. The weekly candle closed as a bearish coloured ‘inside’ candle BUT above the weekly 200 EMA. I still note the lack of trend with the ADX! Clearly, some indecision here.

Weekly Ichimoku: Price is still trading below the weekly Cloud.

Daily: Trend choppy/sideways. The daily chart shows how price basically chopped around between the boundaries formed up by the daily and weekly 200 EMAs for all of January and much of November. Well, welcome back! Price is back trading below the daily 200 EMA but above the weekly 200 EMA.

Daily Ichimoku Cloud chart: The daily Cloud chart shows how price, for most of January, had chopped around just above the Cloud and had spent most of November and December embedded in the Cloud. Whilst price is currently trading above the daily Cloud, it has still not managed to make a decisive break upwards and free from this zone. I remain on the lookout to see which way the USDX will head following this period of being ‘Cloud bound’. A bullish break and hold above the Cloud might signal continued upwards momentum but further failure would be a rather bearish signal.

4hr: Trend choppy/up. Price chopped sideways along the top of the daily 200 EMA until Thursday when EURX strength, following the ECB press conference, seemed to push the USDX lower. Mixed NFP data on Friday didn’t help the USDX much either. Price closed for the week sitting back at the safety near the 50% fib level from the last major bear move (2010-2011).

4hr Ichimoku Cloud chart: Price traded above the Cloud until Thursday and then fell to trade within the Cloud.  Price closed the week below the Cloud. This is divergent from the daily chart and suggests choppiness.

EURX

Monthly: Trend down overall. Price closed for November and December with bullish candles above the monthly 200 EMA. November was the first monthly close above this huge S/R level for 2 ½ years! The January candle closed as a bearish candle and below the major support of both the monthly 200 EMA and the monthly triangle trend line. The new February candle is currently printing a bullish candle and sitting back above the support of the monthly 200 EMA. I have drawn in a new bull trend line though to reflect more recent support.

Monthly Ichimoku: Price had been held back by the monthly Cloud for most of 2013 and had been attempting to push up through this resistance zone. It is now back to trading in the bottom edge of the monthly Cloud.

Weekly: Trend up, overall.  This week’s candle was a bullish candle that closed back above the monthly 200 EMA. I noted last week how this chart has a bit of bearish 'Head and Shoulder' pattern look to it. I’m keeping an eye on this.

Weekly Ichimoku: Price is still trading above the weekly Cloud.

Daily: Trend choppy. Price chopped sideways for most of the week until ECB on Thursday. The news from this release gave the EURX a bit of a boost and lifted the index back above the key S/R level of the monthly 200 EMA. Mixed NFP data on Friday helped to keep supporting this index.

Daily Ichimoku Cloud chart: Price edged higher this week after ECB and reached up to test the bottom edge of the daily Cloud. Further gains after NFP helped this index to close the week up in the bottom edge of the daily Cloud.

4 hr: Trend choppy/down:  Price chopped sideways and slightly higher in a narrow range for most of the week but then rallied after ECB on Thursday.  It closed the week above the support of the monthly 200 EMA and up through a recent bear trend line.

4 hr Ichimoku Cloud chart: Price traded under the Cloud until ECB on Thursday. It then rallied to move up through thin Cloud and gave a new bullish Tenkan/Kijun cross.  It closed the week above the Cloud.  This is divergent from the daily chart and suggests choppiness.

Comments:

USDX: the USDX closed lower for the week, primarily due to EURX strength. ECB and NFP news combined to lift the EURX at the expense of the USDX. Friday’s NFP seems to have rattled this index a bit. The NFP employment change was less than expected but the unemployment rate was better than expected. Thus, perhaps a bit more limbo land here! Price has held above the key support of the weekly 200 EMA but is back below the daily 200 EMA. I continue to watch the weekly 200 EMA for guidance though as I believe that a sustained hold above this level would support bullish continuation but a further breach might be rather bearish.

EURX: the EURX closed higher for the week helped higher by the ECB president’s comments on Thursday and, then, by NFP on Friday. Price has closed back above the major S/R level of the monthly 200 EMA.

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.