The US$ has essentially been range bound between 92.50 and 100 for the last 12 months. I keep waiting for the confluence of data that will shake the US$ out of this channel and wonder whether this might be the week for such a move to occur? Today, Wednesday, brings USD Private NFP, Trade balance and ISM Non-Manufacturing PMI data as well as FOMC Meeting Minutes. Thursday brings the weekly Unemployment Claims but Friday brings the big kahuna event of NFP. Strong prints with all of these data items just might provide the trigger to start a breakout move.
USDX weekly: price is edging back up to the key 100 level and this will be the threshold level to watch for any bullish breakout move. Note the adjustment to my Flag trend lines. The ADX hasn’t budged in months and so I have adjusted the trend lines to parallel with this indicator.
EURX weekly: price is edging back down to the 96 level. A break and hold below this support would bring the 94 back into focus. Note the trend line adjustment here too. The bullish breakout level to watch is up near the top Flag trend line near the 100 level.
Ichimoku Alignment: the FX indices are not aligned at the moment BUT are close to tipping back towards a LONG US$ and SHORT EURX pattern.
USDX: the USDX is trading above the 4hr Cloud and trying to hold above the daily Cloud. Success here would see the USDX suggesting LONG US$.
USDX 4hr: above the Cloud:
USDX daily: trying to hold above the Cloud. Success would support a LONG US$ bias.
EURX: the EURXis trading below the 4hr Cloud and within the daily Cloud. A move and hold below the daily Cloud would support SHORT EUR trades.
EURX 4hr: below the Cloud:
EURX daily: within the 4hr Cloud. A move below this daily Cloud would support SHORT EUR trades:
Summary: Watch the FX Indices following this week’s US data to see if there is any range breakout on either the USDX or the EURX:
- USDX: 100 and 92.50.
- EURX: 96 / 94 and 100.
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