The USDX has stalled at the resistance presented by the major monthly bear trend line and is currently consolidating under this trend line ahead of tonight’s NFP. This ‘consolidation’ could be another ‘Bull Flag’ in the making though and tonight’s NFP result, along with other US data, might help to determine the outcome here.
USDX 4 hr:Â A ‘Bull Flag’ forming here? Note the daily support trend line under current price:
USDX daily: the daily candle closed as a decent sized bearish candle and this has resulted in a type of a bearish-reversal ‘Evening Star’ pattern forming. Note, also, the daily support trend line under recent price action:
Evening Star pattern: click on the link to read more about these patterns. The pattern on the USDX doesn’t have the ‘gaps’ but that isn’t always essential:
I have enlarged the USDX daily chart candles below to make this pattern easier to see. You would have to expect that a daily chart technical pattern would trump a 4hr chart pattern. Here’s hoping anyway!:
USDX weekly: the weekly candle is currently printing a bullish coloured Doji reflecting the current level of indecision. Apart from this week, there have been eleven bullish weekly candles printed here. This fact alone, apart form the monthly trend line, would suggest that some pull back is in order…..IMHO anyway!
Summary:
- the USDX has stalled under major resistance ahead of key US NFP, Trade Balance and Non-Manufacturing data being released tonight. This consolidation action has formed a ‘Flag’ pattern on the 4hr chart. Watch these trend lines for guidance.
- watch for any ‘make or break’ of this major monthly trend line following tonight’s US data.
- the daily chart has presented a potential bearish reversal pattern. Watch for any bearish continuation and break below the daily support trend line.
- I am hoping for a definitive response on this index tonight as there isn’t a lot of scheduled USD data next week to offer traders much guidance. There is ‘FOMC minutes’ scheduled for Wednesday but little other than that. Thus, a lack of clarity after tonight could mean the index might range around this region for a bit longer, at least until possibly Wednesday, thus making FX trading rather choppy.Â
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