US$ weakness setting up a perfect storm?

The US$ has resumed its slide within the descending trading channel and is heading to a major support level at 92.50 which will be the defining region for the US$ in coming sessions. It seems some recent upbeat European data, weak US data and the failure of the BoJ to announce further easing have all combined to keep pressure on the US$. Strangely, and perhaps perversely, this could set up perfect storm conditions to support a ‘risk on’-style rally.

NB: this is just a quick update as I am travelling and away for the next month.

USDX weekly: watch for any make or  break of 92.50. 

USDXweekly

USDX daily: the lower Lows have returned but watch for any make or break at 92.50.

USDXdaily

FX Index Alignment: the FX indices are not aligned as yet but the USDX is below the Cloud on the daily and 4hr charts which is bearish. However, the EURX is within thin cloud on the 4hr and daily charts and could shift either way. A small move higher would tip the FX indices into a Risk On alignment.

EURX 4hr Cloud: watch for any move up and out of the 4hr Cloud:

EURX4hrCloud

EURX daily Cloud: ditto here:

EURXdailyCloud

S&P500: the Death Cross has closed off but the index is struggling at resistance from the 2,100 region. Watch for any make or break of this area in coming sessions:

S&Pdaily S&Pweekly S&Pmonthly S&P500DeathCross

Oil, Copper and Gold: have all put in decent monthly candles and any continued US$ weakness would most likely fuel this move:

Oil monthly:

CLmonthly

Copper monthly:

HGmonthly

Gold monthly:

GCmonthly

Forex and Gold MT4 charts:

Gold: I had been watching for either a bearish H&S or a Bull Flag to evolve and we got the latter. The close above the weekly 200 EMA is very significant and now brings the monthly chart’s 50% fib near $1,300 into focus. Any close and hold above this would suggest a test of the monthly chart’s major bear trend line and then the weekly chart’s 50% fib near $1,500:

Gold daily: Bull Flag wins:

GoldDaily

Gold weekly: a close above the weekly 200 EMA is significant:

GoldWeekly

Gold monthly: an impressive monthly candle close up near $1,300:

GoldMonthly

EUR/USD: this has had a bullish week and is back up at the upper trend line of the daily chart triangle. Watch for any make or break from this level. Any move higher will bring the 1.15 level back into focus and any bullish move above this would bring the 1.18 and the 1.22 levels into focus as per the highlighted sections on the charts.

The E/U is above the 4hr and daily Clouds, printed a bullish engulfing weekly candle and a bullish monthly candle. It’s looking bullish for now and note the uptick with daily chart buying momentum:

EUmonthly EUweekly EUdaily EU4

EUR/JPY: this suffered with the BoJ action and resultant Yen strength to react at the key 126 level and head back down to the support of the monthly chart’s 50% fib at 122. Any continued weakness here would bring the monthly chart’s 61.8% fib near 115 into focus.

Price is below the 4hr and daily Cloud, printed a n almost bearish engulfing weekly candle and a bearish monthly candle.

EJmonthly

EJmonthlyCloud

EJ4

AUD/USD: The Aussie fell following AUD CPI data but US$ weakness means it has held above a support trend line. Watch for any make or break from this region though with the RBA in the coming week.

Price is below the 4hr Cloud but above the daily Cloud. It printed a bearish weekly candle and an indecision style spinning top monthly candle.

AUmonthly AUweekly AU4

AUD/JPY: the weekly/monthly chart’s bear trend line and daily 200 EMA were too mush resistance for this pair. Price has headed back to the 80 S/R level and this will be the one to watch in coming sessions.

Price is below the 4hr and daily Clouds, printed a bearish engulfing weekly candle and bearish monthly candle.

AJmonthly AJweekly AJdaily AJ4

GBP/USD: this might be the most interesting pair at the moment.It closed the week above the key 1.46 level and this could be the neck line for a bullish inverse H&S move. I’m sure there would be many lining up to SHORT here given Brexit woes but with the US$ looking vulnerable above 92.50 support any weakness there would fuel a move higher for the Cable.

Price is above the 4hr and daily Cloud and both the weekly and monthly candles were bullish so I’d watch for any move higher to head to test 1.50:

GUmonthly GUweekly GUdaily GU4

NZD/USD: this is back near the 0.70 level and top of the weekly Flag pattern and this is the region to watch as the US$ tries to hold above 92.50 support.Any US$ weakness could trigger a bullish breakout here.

Price is above the 4hr and daily Cloud and both the weekly and monthly candles were bullish:

KiwiMonthly KiwiWeekly Kiwi4

USD/JPY: this has finally broken below the weekly 200 EMA. I’m now looking for that test of the 100 – 101.50 region that I’ve been on about for ages as this would help form the ‘Handle’ for the Cup’n’Handle I’m watching as well as the inverse H&S.

Price is below the 4hr and daily Cloud and formed a bearish engulfing weekly candle and bearish monthly candle.

  • I’m keenly watching the 100 -101.5 region:

UJmonthly

UJmonthly

UJweekly UJdaily

USD/CAD: I’m watching this weekly 200 EMA and weekly 61.8% fib confluence zone:

LoonieMonthly

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