The US$ index has stalled at the 103 whole-number level following the boost it got with FOMC’s hawkish rhetoric. The EURX closed lower for the week but, only marginally so, and it still has some technical support in store…believe it or not! The tide certainly seems in favour of continued US$ strength but, IMHO, this EURX support needs to be taken out for the tide to fully turn.
NB: updates are brief over the Christmas and New Year period.
USDX monthly: the Bull Flag looks to be underway with 120 as the long-term target:
USDX 4hr: FOMC helped to lift the index through the 100 level but subsequent whole-number levels will be ongoing resistance. Price stalled at 103 to see out the week:
EURX weekly: this index closed lower for the week, but only slightly so, and with the print of an indecision-style Doji. Price remains above the weekly Cloud for the time being and I would prefer to see a close below this support before being confident of bearish follow-through. If so though, I’d expect a test of 96.
EURX monthly: any test of 96 would pique my interest to watch for any hold there and to then support a potential monthly Inverse H&S pattern, albeit a wonky one!
FX Index Alignment: the FX Indices are currently aligned for Long US$ and SHORT EUR$.
Summary: the FX Indices are currently aligned for LONG US$ and SHORT EUR$ and any EUR index close below the weekly Cloud would further underpin this sentiment.