The coming week could prove crucial for the US$ given it spent much of last week prevaricating near a final zone of support following the plunge of the week before. It might be a slow start to the week with the Memorial Day holiday but Friday’s NFP might trigger make or break time for the US$ index.
USDX weekly: watch with this week’s data, especially Friday’s NFP, to see if the US$ recovers or weakens from here. I do note that the weekly candle ended up closing as a bullish coloured ‘Spinning Top’ reflecting the current level of indecision.
Any break below the weekly Cloud will have me watching the following levels:
- the bottom trend line of the symmetrical wedge pattern.
- the 50% Fibonacci level down near 88.
- the 61.8% Fibonacci level down near 85. (Note the amended Fibonacci range here. I’ve captured the whole of the last swing high move now; as I see that is!)
Technical theory would suggest that this broken trend line might be tested though before any potential follow-through so be on the lookout for that possibility:
EURX weekly: This index also closed with a bullish coloured ‘Spinning Top’ candle suggesting indecision BUT note how price is edging up towards the upper channel trend line here:
FX Index Alignment: The FX Indices are still hanging in being aligned for SHORT USD and LONG EUR and this alignment has implications for trading currencies. Any further recovery with the US$ would tip the indices out of alignment though.
Calendar: watch the following items for impact of US$ price action.
