USDX
Monthly: The July candle closed as a bullish candle, matching in size of the previous monthly bearish candle. The last five months have alternated between bullish and bearish candles.
Monthly Ichimoku: The July candle closed above the Cloud.
Weekly: Last week’s candle closed as a bearish coloured Doji candle pointing to ongoing indecision. There had been an earlier ‘Bull Flag’ breakout and a pullback to test the broken trend line but now, with lack of bullish follow through, I’ve adjusted the trend lines to set up a new Flag pattern. Any bullish continuation from here though will bring the 100 level back into focus with some possible ‘Triple Top’ jitters.
Weekly Ichimoku: The weekly candle closed ABOVE the weekly Cloud.
Daily: There were three bullish days book-ended with bearish candles. The 100 level remains as overall resistance above current price.
Daily Ichimoku Cloud chart: Price traded above the daily Cloud last week.
4hr: Price chopped down, up and then down last week.
4hr Ichimoku Cloud chart: Price traded up through the 4hr Cloud last week but closed back within the Cloud. This chart is divergent from the daily chart and suggests choppiness.
EURX
Monthly: The July candle closed as a bearish coloured ‘Spinning Top’ or Doji candle but just above the key 96 ‘Double Bottom’ level. The last five months have alternated between bullish and bearish here as well.
Monthly Ichimoku: The July candle closed below the Cloud.
Weekly: The weekly candle closed as a bearish coloured Doji candle BUT above the key 96 level. There have been two conflicting technical patterns competing over recent weeks, a basing-style bullish ‘Double Bottom’ and a ‘Bear Flag’, but neither pattern has clearly trumped yet.
Weekly Ichimoku: Price is still trading below the weekly Cloud.
Daily: There were three bearish days book-ended by two bullish ones.
Daily Ichimoku Cloud chart: Price is still under the daily Cloud.
4 hr: Price chopped up, down and then up last week.
4 hr Ichimoku Cloud chart: The EURX moved back down into the 4hr Cloud last week. This chart is still divergent from the daily chart and suggests choppiness.
Comments:
General:
- Both indices printed bearish weekly Doji candles.
- Both indices continue consolidating sideways in Flag patterns.
- The EURX and USDX charts are not in alignment.
- Each week I keep anticipating which looming economic data-event might trigger a breakout from both of these index Flag patterns. I am beginning to think that there may not be a decisive Flag breakout on either index until the Federal Reserve actually announce a specific month for a US interest rate hike.
USDX: The US$ and the EURX both had a bearish week and the US$ index is back consolidating within another Flag pattern.
For me though, as mentioned over many recent weeks, the US$ is still in no-man’s land whilst it trades above 92.50 and below 100. I am still waiting for a decisive breakout from this region to signal the next major directional move on the index as this choppy and range-bound price action has gone on for five months now.
Thus, the levels to keep watching on the USDX are:
- The Flag trend lines.
- The psychological 100 level above current price. This is the top of the recent trading range.
- The 92.50 level below current price. This is the bottom of the recent trading range.
EURX: The EURX closed lower for the week as well but is still holding above key support for the time being. The fact remains that, even apart from the uncertainty of ongoing Greek-debt negotiations, the Eurozone is trading within a monetary easing cycle and the US is emerging from one.
The levels to watch on the EURX remain as:
- The Flag trend lines.
- The 105.5 level: The weekly chart reveals that a 61.8% fib retracement of the recent lengthy bear move is back up near the 105.50 level and weekly 200 EMA. Any hold back above 96 and continued recovery effort might see the index target this region.
- The 96 level:This is a major support level for the EURX and a possible bullish ‘Double Bottom’ region.
- The 94 level: Any break and hold back below 96 might suggest bearish continuation as it represents a break of the monthly charts ‘Double Bottom’. If so, the recent low printed near 94 will come back into focus.
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, 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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