US$ & EUR$: both log-jammed! By Mary McNamara

Both FX Indices have printed reversal-style weekly candles as they remain log-jammed at their respective S/R levels. I don’t try to predict which way things will move but, rather, watch for trend line breaks to offer clues about any new breakout move and this is what I’ll be doing with both of these indices next week.

USDX weekly:  The index has closed the week just above the weekly 200 EMA, a support level since mid 2014, and it has printed a bullish-reversal ‘Inverted Hammer’ candle as well. However, there is a Bear Flag pattern in play on the daily chart so watch these trend lines next week for any new directional clues.

Recall: the US$ longer-term uptrend remains intact until such time as it breaks and holds below the 61.8% fib of the most recent weekly swing high, and this level is down near 85.

I still also note with interest that if you place Fibonacci retracement on the recent swing low move, since the start of 2017, then the 61.8% fib level is up near the previous S/R level of 100. Thus, I will be watching this 100 level if there is any recover move away from the weekly 200 EMA and up from the daily chart’s Flag.

Keep watch of the following levels in coming sessions:

  • the weekly 200 EMA.
  • the previous S/R level of 92.50.
  • the bottom trend line of the symmetrical wedge pattern.
  • the longer-term weekly swing high 50% Fibonacci level; down near 88.
  • the longer-term weekly swing high 61.8% Fibonacci level; down near 85.
  • the recent weekly swing low 61.8% Fibonacci level; up near 100 if there is any recovery move.

USDX daily: This has a bit of a Bear Flag look to it so watch the Flag trend lines for any new breakout clues; up or down!

EURX weekly: this index has printed a bearish-reversal ‘Hanging Man’ candle as it struggles at the monthly 200 EMA resistance level. Note how this index has been in a long uptrend though and so a pause or pullback would not be out of order here, even if there is to be a longer-term recovery move. I note the 61.8% fib of this recent swing high move is down near previous S/R around 101.5 and the weekly 200 EMA:

EURX Daily: whilst the daily USDX has a Bear Flag look to it this index has a Bull Flag look on the daily. Thus, watch trend lines for any breakout clues:

FX Index Alignment: the FX Indices are NOT aligned at the moment.

Calendar: Take note of the ECB Draghi speeches, the EUR PMIs and USD Core Durable Goods as well as the all important Jackson Hole Symposium:

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