The first US session after FOMC was always going to be the test for the USD and, from my perspective, it hasn’t fared too well. The US session is yet to close but the gains printed during the Asian session have been lost during the US session thus far as the index now trades back below the major resistance triangle trend line.
There is one more session before both the weekly and monthly candle close off and, thus, for the USD to try and prove itself. A failure to close above this trend line would be a rather bearish signal indeed.
USDX 4hr: the USD is struggling to make a close and hold above the major monthly triangle trend line. Success here, though, would still mean it then has the inevitable ‘Double Top’ matter to deal with.
EURX daily: the EURX has got wind of this potential USD weakness:
Summary: watch for the weekly and monthly candle close to gauge the success of the USD rally: a failure to close above the monthly trend line would be bearish whereas success would be bullish.
Seeing the USD struggle and stocks continue to rally has me back on the lookout for a return to some classic style ‘risk on’.
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