Despite mixed global data, US$ weakness framed the trading day by Mary McNamara

There has been mixed to weak global data but despite this US$ weakness has defined much of the recent trading movement. Stocks traded higher on some upbeat earnings results with the NASDAQ printing a new closing high.

 USDX 4hr: weaker than expected New Home Sales and Unemployment data resulted in a sell off for the US$. This index remains range bound between 100 and 95.50 and also remains divergent on the Ichimoku charts. These two points suggest further choppiness is ahead:


EURX 4hr: despite weaker European Manufacturing PMI data the index is trading higher. This is no doubt due to US$ weakness but some are also suggesting short-covering ahead of Friday’s Eurogroup meetings as a cause too:


S&P500 30 min: traded higher on the day:


Forex: there are Eurogroup meetings on Friday that traders need to be mindful of. Any + or – Greek-related news could result in wild swings for EUR pairs. There is also US Core Durable Goods plus a speech from BoC Gov Poloz.

EUR/NZD Case Study: I wrote a separate article about this pair yesterday. This can be found through the following link. In this article I advised traders to watch for any new close above a recent daily bear trend line and above the 4hr Cloud. Price has now closed above both of those key levels so I will be watching for any further signs of bullish continuation. Today’s Eurogroup meetings could trigger some EUR based movement so I will wait until after then to re-assess.

E/N daily: price has closed above the daily bear trend line:


E/N 4hr: the 4hr 200 EMA is in the way for now though:


E/N 4hr Cloud: price is trying to break free from the Cloud:


Other FX:

E/U 4hr: has made a bullish triangle breakout but is chopping sideways now ahead of Friday’s Europgroup meetings. Any close and hold above the 4hr 200 EMA would suggest bullish continuation::


E/J 4hr: much the same story here:


A/U 4hr: still consolidating. Watch the triangle trend lines:


A/J: chopping sideways:


Cable: closed above 1.50 despite the weaker GBP Retail Sales data result.


Kiwi 4hr: fell following yesterday’s RBNZ comments about possible future rate cuts. Now looks to be in a daily-chart bearish ascending wedge:


Kiwi daily: the bearish wedge is evident here:


U/J 4hr: lower with the lower US$:


U/J daily: still ranging within an ascending wedge:


GBP/JPY daily: still ranging within a bullish descending wedge:


Loonie daily: in no-man’s land!


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