FX Indices: tipped now to align for ‘risk on’

The huge move with the EUR$ during the last session has tipped the FX indices into a ‘risk on‘ alignment. That is, the FX indices are aligned for SHORT US$ and LONG EUR$.

Periods of alignment often produce decent trending markets off the longer time frame charts and more reliable 4hr chart-based TC signals. The elephant in the room though is next week’s FOMC as this news has the potential to undermine this alignment. Thus, I’ll be watching for any risk on shift but will remain cautious in the lead up to next week’s FOMC. For the time being though, during the late Asian session, I’m seeing Oil, the S&P500, A/U and A/J all tick higher.

NB: I’m am at a trading conference tomorrow (Saturday) and so my w/e updates will be more brief than usual and delayed.

USDX daily: below the daily Cloud which is bearish:

USDXdailyCloud

USDX 4hr: below the 4hr Cloud which is bearish:

USDX4hrCloud

EURX daily: above the daily Cloud which is bullish:

EURXdailyCloud

EURX 4hr: above the 4hr Cloud which is bullish:

EURX4hrCloud

Summary: the FX Indices are currently aligned for ‘risk on’ but traders need to exercise caution in case next week’s FOMC undermines this alignment.

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