FX Indices Review for 05/08/13

USDX

Monthly: Trend ranging / upwards. The July monthly candle closed as a large bearish candle. The monthly 200 EMA and the 84 area continue to be resistance.
Weekly: Trend up overall. The weekly support trend line is still supporting price. The weekly candle closed as a small bullish candle. Price bounced off the key S/R level of 81.70 during the week. The weekly chart shows how significant this level has been. Price closed the week above this key level.

Daily: Trend choppy. Price traded around the 81.70 for much of the week but then bounced up on Thursday.

Daily Ichimoku Cloud chart: Price traded below the Cloud to start the week but drifted up into this on Thursday but closed the week just below the Cloud.

4hr: Trend down overall. Price drifted sideways to start the week but rallied from Thursday. Price was rejected on Friday though by the double whammy of:

  • NFP & the mixed US employment data and 
  • the technicals of the 4hr 200 EMA and monthly pivot.

Price then tumbled after NFP to close the week just above the key 81.70 level.

4hr Ichimoku Cloud chart: Price traded below the Cloud to start the week but drifted into the Cloud on Thursday where it has stayed. This is divergent with the daily chart and suggests choppiness.

EURX
Monthly: Trend down overall but 9 of the last 12 months have been bullish. The July monthly candle closed as a bullish candle. The very new August candle is an indecision style ‘spinning top’.

Weekly: Trend up, overall. Price failed to move above the monthly 200 EMA back in January. Price is back struggling at this area again now. This level had been major resistance so it was no surprise that price had paused here. Price action had been quite parabolic for ‘risk on’ and subsequently pulled back to the mean of the support trend line. Price bounced off this major support level and has held up for the last 18 weeks. The weekly candle closed as a bullish candle.

Daily: Trend ranging. Price broke out of the ascending trading channel this week and closed the week out of the channel.

Daily Ichimoku Cloud chart: Price chopped upwards above the Cloud all week.

4 hr: Trend choppy:  Price chopped upwards all week and broke through the upper trend line of the ascending trading channel.

4hr Ichimoku Cloud chart: Price traded above the Cloud all week. This is in alignment with the daily chart and supports ‘risk on’.

Thoughts:

USDX: NFP really whacked things around on Friday.The mixed US employment data results sent the USD tumbling on Friday as thoughts of early QE easing seem to have faded for the moment. I’m still hoping to see this index either clear up over the 84 level or break below the weekly support trend line. It’s still stuck in a bit of ‘no man’s land’ at the moment.

The EURX: The EURX is holding up above the Ichimoku Cloud which is bullish. It has now also broken out of the trading channel which is also bullish.  

Choppy markets + Ichimoku: The Ichimoku charts alignment did not last through the week. Previous alignment has often resulted in extended trending periods. I’ll be watching closely to see if this alignment returns.
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 Euro zone based dramas and/or news announcements, continue to be unpredictable triggers for price movement on the indices.  These events will always have the potential to undermine any technical analysis.