Both FX indices have closed with small bullish candles but the story might be more in their ‘shadows’. The USDX candle closed with a long lower shadow giving this a somewhat bearish tinge and the EURX printed a long upper shadow giving this a bullish-reversal ‘Inverted Hammer’ appearance. Either way, both remain in their respective Flag patterns so breakouts from these need to be seen, IMHO that is, before and decent trending FX markets will return.
USDX weekly: holding within the broadening wedge on the longer time frame chart for the time being:
This could still evolve into a Bear Flag so watch for any trend line breakout. Bullish continuation though would have me looking for a test of the 100 S/R level as this is also the weekly 61.8% fib:
USDX daily: watch the 95.50 for any new make or break:
EURX weekly: a bullish-reversal style Inverted Hammer off support to close out the week. Watch trend lines for any new breakout; up or down!
FX Index Alignment: the FX Indices are currently aligned for LONG USD and SHORT EUR. However, given the range bound ‘Flag’ nature of both FX index weekly charts, I would urge a bit of caution with this knowledge.
Data: there isn’t a lot of US data but the Commodity Currencies help to fill this void!
