FX Update: Is the USD getting its mojo back? by Mary McNamara

I had mentioned in my w/e analysis that the USD index might not move much until the first piece of high impact USD data was released and this has unfolded exactly as thought. Better than expected New Home Sales data has given the USD a lift and helped it break up to new highs for the week.

USDX 4hr: the USD has broken above recent highs:


USDX monthly: It’s a bit early to get too excited here yet though. The major resistance levels of the 78.6% fib and the monthly bear triangle trend line are still above current price and have yet to be negotiated:


EURX daily: heading towards the bottom trend line of the trading channel:


EURX monthly: you just never know…..my inverse H&S may still evolve here if the EURX pulls back further!


S&P500: welcomed the positive USD data news with a big rally:


TC Signals:

GBP/CHF: this has rallied up to 50 pips to make a close above the recent resistance level:


CAD/JPY: this signal did give up to 50 pips BUT I had suggested to wait for a break from the trading channel. This has evolved as a bullish breakout:


USD/CAD: this spiked up to 70 pips but reacted badly to the major resistance trend line. I would be waiting for at least a daily close above this trend line:


Other FX: there is high impact data for the AUD, USD and GBP today that traders need to watch out for:

E/U: The stronger USD and talk of ECB stimulus have combined to weaken this pair. The E/U has now fallen below the support of both the monthly 200 EMA AND the major 61.8% fib of the 2012-2-14 bull run. I discussed this key level at length in my w/e analysis. 

A new TC signal tried to form here but took too long to evolve. However, the break below the 61.8% fib offers a technical short entry…IMHO. I am thinking this pair could pull back down as far as the bottom of the descending triangle at 1.18:

E/U 4hr:


E/U weekly:


E/U monthly:


EUR/AUD: a new TC signal formed here but isn’t valid as the pair is above the 4hr and daily Cloud. It is a technical trend line break though:


E/J: choppy still  but any rally with the U/J could drag this pair back up along as well though:


A/U: holding up well despite the stronger USD. Watch for any trend line break, especially around RBA Gov Stevens talk time today during the Asian session:

A/U 4hr:


A/U hourly Cloud: watch for any move back above the hourly Cloud as well:


A/J: This pair did pull back to within 10 pips of the 96 level:


U/J: the stronger USD has helped to lift this pair and make a ‘Bull Flag’ breakout:


Kiwi: still holding above the weekly 200 EMA support. Clearly, this is a key level for many traders:


GBP/JPY: continues to chop sideways:


Cable: a support trend line is still in play here:


AUD/NZD: no new TC signal here but there has been a technical channel breakout:


Gold: has not enjoyed the stronger USD:


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