US$ heading for a Bull Flag breakout? by Mary McNamara

The US$ and US stocks rallied on Monday buoyed by some up-beat 2nd tier US economic data. That, and maybe the Easter week effect. The US$ index has attempted a Bull Flag breakout but has some 4hr Cloud to cut through before having a clear path back up to the 100 level.

 USDX 4hr: is trying to follow through from the Bull Flag breakout:

USDX4

USDX 4hr Cloud: it will have to break up through the 4 hr Cloud to create a clear path to the 100 level though:

USDX4hrCloud

EURX 4hr: this is holding up surprisingly well considering recent US$ strength:

EURX4

EURX monthly: tomorrow will be important though when this monthly candle closes. Strangely, any hold above 96 would support bullish sentiment:

EURXmonthly

EURX 4hr Cloud: like the USDX though, this is back in the congestion of the 4hr Cloud:

EURX4hrCloud

S&P500: has made a nice bounce up off the daily Cloud. Watch for any new bullish Tenkan/Kijun cross:

S&PdailyCloud

Silver 4hr: has pulled back a bit with US$ strength but might get some 4hr Cloud support:

Silver4hr Silver4hrCloud

Gold 4hr: ditto here with Gold:

Gold4hr Gold4hrCloud

Forex: The FX indices are both embedded in their 4hr Ichimoku Clouds and my experience has been that 4hr chart trend trading is choppy during these periods and best to be avoided. I have documented this on this website and my notes can be found through this link. I note there how trend trading off shorter time frames in the US session is generally more successful during these periods and the charts below are testimony to this fact:

Loonie 30 min: tend trading during the US session is a much safer prospect:

Loonie30min

A/U 30 min: there was much better momentum during the US session:

AU30min

U/J 30 min: trading during London and then the US session was a much safer prospect here too:

UJ30min

Other Forex: watch the FX indices for any 4hr Cloud breakout and for any bullish continuation on the USDX as this will impact FX pairs. 

E/U: this has broken below a recent support trend line but there hasn’t been any new TC signal or much follow through yet. Hence the addition of the ‘Flag’ trend lines. Price is in the 4hr Cloud ahead of tonight’s EUR inflation data:

EU4 EU4hrCloud

E/J 4hr: not much happening here just yet:

EJ4

A/U daily: I have relaxed the trading channel trend lines here to capture more price action. Price has fallen to start the week in sympathy with commodity prices but is respecting the lower trend line for the time being.

AUdaily

A/U 4hr: any further US$ strength will continue to put pressure on this pair and may trigger a channel breakout trade:

AU4

A/J daily: is this setting up for a test of the broken trend line before follow through on a 1,200 pip Bear Flag?

AJdaily

Cable weekly: this bearish H&S still looks threatening ahead of tonight’s GBP Current Account data. A monthly close below 1.50 would be bearish and may support this technical pattern. Watch the 1.50 level and the H&S ‘neck line':

GUweekly

G/U 4hr: watch for any monthly candle to close below 1.50 after tomorrow’s trade:

GU4

Kiwi 4hr: is lower for the week but Business Confidence data is to be released in an hour. Price is getting some support from a recent trend line, the 50% fib of the recent bull run and the bottom of the 4hr Cloud:

Kiwi4 Kiwi4hrCloud

U/J: made a bullish descending wedge breakout but is now in the 4hr Cloud:

UJ4 UJ4Cloud

GBP/JPY: this is trying for a bullish descending wedge breakout but has 4hr Cloud ahead of it too:

GJ4hr GJ4hrCloud

Loonie daily: still range bound in the ‘Handle’ of my monthly chart Cup ‘n’ Handle. There is CAD GDP tonight:

LoonieDaily

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