US$: bullish recovery or dead cat bounce?

The US$ index has reclaimed the psychological 100 level for the week but it still has some technical resistance just above current price as it enters a week with plenty of US economic data. With the print of the first bullish candle in six weeks this leaves traders pondering whether the US$ is embarking on a bullish recovery or simply experiencing a dead cat bounce

USDX daily: price has reclaimed the 100 level but hasn’t ventured too far above this psychological zone just yet. This daily chart shows some bullish momentum so watch for any follow through activity. Whilst the potential bearish H&S has not been avoided just yet this recent price action could also be viewed as consolidation in a Bull Flag-style formation. Thus, keep an open mind and watch for any break of the Flag trend lines and / or the 100 or 102 levels.

USDX daily Cloud: price remains within the congestion of the daily Ichimoku Cloud so watch for any breakout from this resistance zone; up or down. Note also how the Cloud has flipped to bearish:

USDX weekly: the US$ closed the week with, essentially, a bullish engulfing candle supporting the thesis of bullish recovery. However, note how this is the first bullish candle after six bearish weeks and so traders need to make sure that this isn’t just a dead cat bounce. I suggest watching the daily chart’s Bull Flag trend lines, the Daily Ichimoku Cloud boundaries and the 100 and 102 level for clues as to which sentiment, bullish or bearish, might develop from this point on.

EURX weekly: by contrast, the EURX closed the week with, essentially, a bearish engulfing candle and below the psychological 100 level.

USD data: There is a lot of economic data to impact the US$ this week. Monday is spared but every other day has significant high impact data with Fed Chair Yellen speeches on both Tuesday and Wednesday:

Summary: The US$ has recovered a key psychological level this week with the close above 100 but a dead cat bounce has yet to be ruled out. Watch the following levels to gauge which sentiment, bullish or bearish, might develop next week:

  • the daily chart’s Bull Flag trend lines.
  • the Daily Ichimoku Cloud boundaries.
  • the 100 and 102 levels.

The post US$: bullish recovery or dead cat bounce? appeared first on Trade Charting.

The post US$: bullish recovery or dead cat bounce? appeared first on www.forextell.com.

Leave a Reply

Your email address will not be published.