The US$ recovered on Friday following a NFP print that was deemed reasonable considering the increased wages component despite a setback in employment numbers. However, the index still only managed to print an indecision-style ‘Inside’ candle for Friday and a bearish one for the week. The US$ still needs to print either a lower High or lower Low before any reversal might evolve but for now the uptrend, whilst paused, is still intact.
NB: this is just a brief update due to our summer holidays.
USDX monthly: The Bull Flag looks to be in progress for now although the new monthly candle is printing a bearish coloured Doji and this follows on from the December ‘Spinning Top’. Not hugely inspiring just yet although it is still above the key 100 level.
USDX daily: the uptrend has paused a bit of now although it is still intact. There needs to be either a clear cut new lower High or lower Low to support the start of any reversal and these have not been printed as yet.
EURX weekly Cloud: the EUR index remains above the support of the weekly Cloud:
FX Index alignment: The FX Indices are not currently aligned and this has implications for my algorithm. During these periods trading is generally better off the 30 min chart time frame during the European and US sessions than off 4hr charts.
USDX: below the 4hr Cloud but above the daily Cloud:
USDX 4hr Cloud:
USDX daily Cloud:
EURX: above the 4hr Cloud but below the daily Cloud:
Summary: watch the US$ index for any sign of reversal by way of a lower High or lower Low. However, a close and hold above 104 would support continuation and the Bull Flag scenario.