The US$ and EUR indices have been ranging within flag patterns for over 5 months but the EURX is currently edging back up towards its upper boundary. Add to this that both indices are aligned across the 4hr and daily Ichimoku charts then these range-bound patterns might just be starting to get to the ‘interesting’ stage.
USDX weekly: still Flag bound and no uptick with momentum…. just yet. Watch the Flag trend lines and ADX:
USDX daily Cloud: price looks set to close below the daily Cloud and, if so, will trip the USDX into alignment for SHORT US$.
USDX 4hr: below the Cloud:
EURX weekly: heading up towards the upper Flag trend line so watch this level and for any uptick with momentum:
EURX daily Cloud: above the Cloud as is the 4hr chart and so aligned for LONG EUR:
EURX 4hr Cloud: above the Cloud:
Gold: this metal has been enjoying US$ weakness and is currently up testing a major S/R zone at the 61.8% fib of the 2007-2011 major swing high move. Any continued US$ weakness will help to keep Gold supported but a bounce on the US$, back up from the bottom Flag trend line, will help those traders wanting to SHORT gold here at this major S/R level:
Gold 4hr: the TC signal here has given a move of over $25:
Gold monthly: back testing the major $1,145 / $1,150 and 61.8% fib region. Watch the US$ though as any continued weakness will support the precious metal:
E/U weekly: the E/U is also heading towards the upper trend line of its flag pattern so watch trend lines and the ADX here too:
Cable daily: any continued US$ weakness will help to support the GBP/USD as well and may help to trigger a triangle breakout:
U/J daily: price action here has been a bot choppy and I didn’t receive any clean TC signal to SHORT but the bottom trend line might end up being a magnet here:
Summary: the FX indices are still Flag-bound for now but watch for any trend line breakouts that evolve along with increased momentum. The FX Indices are about to align for SHORT US$ and LONG EUR and periods like this sometimes, not always, produce decent trending markets.
Continued US$ weakness will help to support Gold but any bounce could help the technical SHORT for Gold off the 61.8% fib region. US$ weakness will also help to support the E/U and Cable and has the potential to trigger triangle breakouts here too.
Now, if stocks turn around and start to trend higher then this could evolve into classic-style ‘Risk On‘!
NB: I am away this weekend so further updates will be brief and few.