USDX still under ‘Double Top’, Stocks rally, Russell 2000 & Silver breakout by Mary McNamara

Last week: there were 3 TC signals last week that delivered over 500 pips: U/J= 180, GBP/JPY= 190 and GBP/USD= 150. These moves reversed rather quickly though and this highlights the need to lock in profits ASAP at time like these.

Next week:

  • Monday is a holiday in the USA and the day for Eurogroup meetings in Europe (Greek debt discussions).
  • Greek debt talks and FOMC are the key risk events for next week. These two events have the potential to cause large moves with both the EUR and USD. Any Greek debt talk breakdown also has the potential to drag currencies like the AUD, NZD, GBP and CAD etc lower as well so this event needs to be monitored. Technical trading in the face of major fundamental events, such as these, is quite challenging.
  • USD index: Bearish ‘Double Top’ or bullish ‘Bull Flag’ forming? The USD index is still under a possible ‘Double Top’. Some weaker than expected USD data has undermined the bullish USD run BUT FOMC, and any commitment to stay on track with increasing US interest rates, could easily see this resume its bullish run. The weekly chart, whilst posting some bearish weekly candles and bearish ‘Double Top’ appearance, could be also be viewed as forming up into a Bull Flag!
  • Stocks continue to rally and the Russell 2000 index has made a bullish break above key 1,220 resistance.
  • The NASDAQ closed above 4,800 but a monthly close above this key level still needs to be seen before getting too excited!
  • Silver has made a bullish wedge breakout.
  • The GBP/USD is looking bullish BUT there is a lot of GBP data next week, and also FOMC, to consider here.
  • I am still seeing the potential for a classic style ‘risk on’ rally but this would need the USD bearish ‘Double Top’ to play out.
  • I am still away and so this only a brief weekend update.

USDX 4hr: The ‘Double Top’ still looms as a possibility here. Any weakness with a close and hold below 92.50 would support this bearish pattern.

USDX4

USDX weekly: looking a bit bearish here for now BUT it could also evolve into a ‘Bull Flag’! Next week’s FOMC minutes might help to add clarity here:

  • A break and hold above 95.50 would support a ‘Bull Flag’.
  • A break and hold below 92.50 would support a bearish ‘Double Top':

USDXweekly

USDX weekly: remember that the 95.50 level is also the 50 % fib of the 2008-2002 bear move:

DXYweekly

EURX monthly: still open to a possible bullish ‘inverse H&S’ here!

EURXmonthly

S&P500: This index has continued on with its bullish run after making a bullish triangle and Cloud breakout and triggering a new bullish Tenkan/Kijun cross:

S&P500 30 min:

S&P30min

S&P500 daily Cloud: there has now been a:

  •  bullish triangle breakout,
  •  bullish breakout from the daily Cloud
  •  new Tenkan/Kijun bullish signal:

S&PdailyCloud

S&P500 monthly: my target of 2,500 is looking quite plausible now!

S&Pmonthly

NASDAQ: I’m watching for any monthly close above 4,800. This is a good start though!

NASDAQmonthly

Russell 2000: this index has made a bullish breakout above 1,220. This constitutes a new weekly high and supports the Bull Flag that has been in play here for some weeks now:

RUTweekly

DAX monthly: my bullish target is looking good here!

DAX monthly

FTSE-100: keep an eye on the 7,000 level here:

FTSEmonthly

ASX-200 XJO weekly: I called a bullish triangle breakout here back on Jan 27th when the index was on 5,541.1. The index is now at 5,877.47 and this is over a 6% gain:

XJOweekly

Oil: continues with its bounce:

CLweekly

VIX weekly: not looking too threatening at the moment!

VIXweekly

TC Signal: the Cable did end up triggering a new TC signal but this hasn’t moved on too far just yet. There is a lot of GBP data next week and FOMC to consider as well. GBP data: CPI, Employment data, Bank Rate Votes & Retail Sales:

G/U 4hr: a new TC signal but this hasn’t dome much yet. Next week’s GBP and USD data might get this moving:

GU4

G/U daily Cloud: the Cable has a bit of work to do BUT if it can break back above the daily Cloud then this would be a bullish signal on its own:

GUdailyCloud

Other Forex:

E/U: watch here for reaction to Greek debt talks AND FOMC.

EU4

E/J holding above a daily support trend line. The 136 level remains a key S/R level here:

EJ4

A/U 4hr: a potential ‘Double Bottom’ here but watch for any fallout from Greek debt talk and from FOMC:

AU4

A/J: might be trying to bottom here:

AJ4

Kiwi: looking a bit bullish as it has broken back above the ‘neck line’ of the bullish ‘inverse H&S’ BUT watch for reaction to NZD Dairy Auction pricing and to FOMC. Eurogroup Greek debt talks might impact here too:

Kiwi4

U/J: seems to be in limbo at the moment whilst it waits to see the next move in the USD. FOMC might help clear up this picture. Note how the 118.5 level has, yet again, been a major S/R level:

UJ4

GBP/JPY: momentum has stalled here so watch for any new move here with an uptick in momentum:

GJ4hr

Silver: this has held above the major monthly triangle trend line AND has made a new bullish move with a breakout from a descending wedge. A new TC signal is trying to form here but I’m watching for a new close above the 4hr Cloud:

Silver 4hr: this has made a bullish descending wedge breakout BUT and resumption of a bullish USD run could undermine this move:

Silver4hr

Silver 4hr Cloud: any new break and hold above the 4hr Cloud would help to support a new TC signal here:

Silver4hrCloud

Gold: in a descending channel and much might depend on the next major move for the USD. A bullish USD might put pressure on Gold:

Gold4hr

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