USD: a warning signal this week for USD bulls by Mary McNamara

USDX

Monthly: The November candle closed as a large bullish candle and sitting above the ‘resistance-now- turned support’ of the monthly chart’s bear triangle tend line but remains below the resistance of the 2010 highs.

USDXmonthly

Monthly Ichimoku: The November candle closed well above the monthly Cloud.

USDXmonthlyCloud

Weekly: Last week’s candle closed as a bearish reversal ‘Hanging Man’ candle. This should flash as a bit of a warning for USD bulls: 

USDXweekly

Weekly Ichimoku: Price is still trading ABOVE the weekly Cloud.

USDXweeklyCloud

Daily: Price spent another week consolidating below the 2010 high. The index chopped a bit lower with three bearish days but this was followed by two bullish days.

USDXdaily

Daily Ichimoku Cloud chart: Price traded above the Cloud all week and there is still an open bullish Tenkan/Kijun cross in play.

USDXdailyCloud

4hr: Price chopped down and then back up last week. It is still trading below the resistance of the 2010 highs. Note the recent support trend line. A break and hold below this would suggest some bearish potential:

USDX4

4hr Ichimoku Cloud chart: Price chopped down through thin Cloud band last week but bounced back up to close above the Cloud. This chart is aligned with the daily chart and suggests long USD.

USDX4hrCloud

EURX

Monthly: The November candle closed as a bullish candle and this follows on from the previous month’s bullish reversal ‘Inverted Hammer’ candle. I am still seeing a larger-scale bullish ‘inverse H&S’ pattern developing as well.

EURXmonthly

Monthly Ichimoku: The November candle closed off within the monthly Cloud. Note the bullish reversal clue from back in October:

EURXmonthlyCloud

Weekly: The weekly candle closed as a bullish coloured ‘inside’ candle.

EURXweekly

Weekly Ichimoku: Price is still trading below the weekly Cloud. Note the earlier bullish-reversal clue here too:

EURXweeklyCloud

Daily: Price chopped higher last week.

EURXdaily

Daily Ichimoku Cloud chart: Price is still trading above the daily Cloud. It is not surprising to see this choppy consolidation type of action after breaking back above a key resistance level:

EURXdailyCloud

4 hr: Price chopped higher last week.

EURX4

4 hr Ichimoku Cloud chart: The EURX traded within the Cloud for much of the week as it chopped higher but eventually closed just above the Cloud.  This chart is aligned with the daily chart and suggests long EUR.

EURX4hrCloud

Comments:

Overall: we have the unusual situation where both indices are above their respective 4 hr and daily Ichimoku Cloud! So don’t be concerned if you’re a bit confused as the indices are too!

USDX: the USDX closed slightly lower in another choppy week and, although it has held above the monthly triangle breakout, it is still struggling at resistance from the previous 2010 highs near 88.50.

The most noteworthy feature on the USDX charts this week, though, is the bearish-reversal ‘Hanging Man’ candle and this looks most ominous. Having such a candle form at major resistance doesn’t bode well for the index and so the 88.50 remains the key level to watch next week.

Any bullish break above 88.50 would put 89.50 and then 90 as next on the radar. The 90 level is a key long term S/R level.

Respect of 88.50 and any trend line break would have me looking for a possible pull back. The index has been on a lengthy bullish run and some pull back, even if only temporary, would not be out of order. Obvious pull back targets include the previously broken monthly trend line and, then, the 83.50 region which is near the monthly and daily 200 EMAs and the 50% fib of the recent bull run (see weekly chart).

EURX: the EURX had a bullish week and continues to hold up well despite the gloomy fundamental EZ picture. Divergence between the Eurozone and US economies continues to be a dominant theme BUT the ‘long USD’ trade still seems a bit battle worn and the EURX is capitalising on this lull.  Any bullish break back above the 4hr and weekly 200 EMA region would be rather bullish. I still have my eye on the bullish ‘inverse H&S’ building on the monthly chart though!

Note: The analysis provided above is based purely on technical analysis of the current chart set ups. As always, Fundamental-style events, by way of any Ukraine, Ebola, Eurozone or Middle East events and/or news announcements, continue to be unpredictable triggers for price movement on the indices.  These events always have the potential to undermine any technical analysis.

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