US$ still teetering post Trump Inauguration

The US$ is still teetering following the Trump inauguration; it is trading below its recent high near 103.50 but is holding above recent support. Traders need to see either a close & hold above 102 to support the case for bullish continuation OR a respect of 102 followed by a close & hold below 100 and a recent support trend line to support the case for a reversal.

USDX daily: The uptrend remains intact for the time being. A move and hold back above 102 would support the case for bullish continuation. However, respect of 102 would help shape a bearish H&S and also help to carve out a lower High; both would suggest there could be some bearish pullback. Any move and hold below the recent support trend line and key 100 level would then help develop this scenario by also printing a lower Low.

FX Indices: the FX Indices remains divergent for the time being and this has implications for trading with my algorithm.

USDX daily Cloud: price remains trapped within the daily Ichimoku Cloud:

USDX 4hr Cloud:  price is below the 4hr Cloud:

EURX daily Cloud: price is now in the daily Cloud here too:

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

Summary: Watch for any signs of continuation or reversal on the US$ index but, for now, the daily EURX and USDX indices are trapped within the daily Ichimoku Cloud suggesting price action across related currency pairs is likely to be choppy. Previous experience suggest that these periods are better suited to trend trading off shorter time frame (30 min) charts during the European and US sessions.

 

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