US$: running out of steam?

The US$ fell heavily during the last session and, considering that there wasn’t any high impact US$ data released, this move is making the index look a bit vulnerable and as if it might be running out of steam and supporters. Second tier data seems to be spooking the index. The EURX, on the other hand, continues to look like it is carving out a base off major 96 support with two separate bullish patterns on the weekly and monthly charts respectively. Add to this, that any further fall for the US$ is likely to tip the FX indices into alignment for ‘Risk On’, then, things are starting to get very interesting!

USDX 4hr: failed to hold above the 61.8% fib, yet again.

USDX4

USDX weekly: I wrote over the w/e how the index is stuck in ‘no-man’s land’ and that remains the case today. There is clearly a zone of congestion between 100 and 92.50 that needs to be broken so as to be more confident of the next directional move with the US$. Commentators are looking to Friday’s NFP for guidance so we shall see if this piece of data does the trick!

USDXweekly

USDX 4hr Cloud: price has fallen back into the 4hr Cloud. Price does not have too far to fall before slipping back into alignment with the daily chart to support SHORT US$ trades.:

USDX4hrCloud

USDX daily: price is back below the daily Cloud:

USDXdailyCloud

EURX 4hr: price continues on its ascent after bouncing back off 96 support

EURX4

EURX 4hr Cloud: price is above the 4hr Cloud:

EURX4hrCloud

EURX daily: price is above the daily Cloud and thus, strange but true, the EURX is aligned for LONG EUR trades.

EURXdailyCloud

EURX weekly: it is worth remembering that the EURX has been setting up in a potentially bullish ‘inverse H&S’ pattern for a few weeks now. The neck-line is sloping the wrong way, but, it is what it is:

EURXweekly

EURX monthly: this bullish weekly-chart ‘inverse H&S’ complements the bullish monthly-chart ‘Double Bottom':

EURXmonthly

Summary:

  • The EURX 4hr and daily charts are aligned for LONG EUR trades.
  • There is a bullish inverse H&S forming on the EURX weekly chart and a bullish ‘Double Bottom’ forming on the monthly chart.
  • Watch for further falls with the USDX to possibly tip this index into supporting SHORT US$ trades.
  • Watch for any breakout on the USDX from the 92.50-100 trading range to gauge the next new trend direction for the index.

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