US$ recovers but 100 keeps it in check

The US$ recovered off the 3-year support trend line last week but still couldn’t make it back above the 100 level; a level that was previous support but has now turned to resistance. The index is squeezed  between these two levels but, also, in the apex of a weekly triangle that has a ‘something has to give one or another’ look to it.

NB: I am still away and so my other weekend analysis report will be brief.

USDX weekly: the index looks set to close with a bullish weekly candle but the long shadows on this, and recent candles, reflects the indecision still present here. Note how price action is becoming squeezed into the apex of the weekly triangle pattern so watch these trend lines for any momentum-based trend line breakout.

The longer-term weekly chart shows the symmetrical broadening wedge is still active and the bottom trend line of this pattern intersects near the 90 level. Thus, any break of the weekly support trend line would bring this region into focus too.

The levels to watch with any breakout move are summarised below:

  • a bullish upper trend line breakout would bring the 102 level back into focus.
  • a bearish lower trend line breakout would bring the 90 level and then the  61.8% Fib, near 88.50, back into focus.

USDXweekly

USDXweekly

USDX daily: there is a recent support trend line in play here too and price bounced off this level as well after last week’s weakness. Note how the 100 level kept the index in check through and so this another level to watch in coming sessions:

USDXdaily

FX Index Alignment: the FX Indices are divergent at the moment but it wouldn’t take much US$ weakness to slip these back into alignment for: US$ SHORT and EUR$ LONG.

Calendar: there isn’t much high impact data so watch for impact from second tier data as well:

calendar

Summary: Watch the the USDX weekly chart’s triangle trend lines and key 100 level for any momentum-based breakout move:

  • a bullish upper trend line breakout would bring the 102 level back into focus.
  • a bearish lower trend line breakout would bring the 90 level and then the 61.8% Fib, near 88.50, back into focus.

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