USD index: tide hasn’t turned….yet

Lots of traders are looking for signs of weakness with the USD index and for a possible reversal. Whilst I’m one of these, apart from a general lack of momentum which isn’t too surprising at this time of year, I’m not seeing many other technical clues just yet.

NB: this is just a brief update as I’m busy with holiday guests. Please also note that there will be changes to the mail out of future blog articles this year.

USDX monthly: if anything, the Bull Flag still seems to be in force here with an uptick in monthly momentum.

USDX weekly: momentum is declining on the weekly time frame though but that may just be due to the season. Keep an eye on the ADX into next week:

USDX daily: there is a bit of bullish momentum on the daily time frame but nothing earth-shattering. There is a continued pattern for now of Higher Highs and Higher Lows which supports bullish continuation but watch to see if the index can keep up with the Higher Highs as it is struggling to launch up from 103 at the moment. Any new Lower High or Lower Low could spell out the beginnings of a pullback:

USDX 4hr: not much momentum on this time frame just now:

FX Index Alignment: the FX Indices are back in alignment for LONG US$ and SHORT EUR$ though. Thus, I’d be wary shorting the US$ at the moment.

USDX daily Cloud: price action is above the Cloud:

USDX 4hr Cloud: price action is above the Cloud here too supporting LONG US$:

Summary: the LONG US$ trade has dominated pretty much since last September and whilst some are looking for a decent pause, pullback or reversal, I’m not seeing many technical clues that this is in in play just yet. Momentum is week on the 4hr and weekly time frames but price action continues printing Higher Highs and Higher Lows for the time being and price is also holding above the Bull Flag 100 breakout level. Watch for any new Lower High or Lower Low to support a possible pullback though.

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