The US$ has failed to hold back above 102 resistance and the break from the recent daily triangle ended up being a break to the downside! Added to this is that the EURX is back up out of its weekly Cloud and closed the week above the psychological 100.
USDX daily Cloud: the triangle break ended up being to the downside despite the upbeat US jobs numbers. The question here is: was this break lower just a bit of profit taking ahead of a leg higher after next week’s NFP or was it due to the weaker wages component of NFP and a possible precursor of further weakness ahead? I suggest watching to see if price breaks back below the daily Cloud and then key 100 level.
USDX daily: the potential H&S is still visible here but looking rather wonky. I’m not sure if it would survive another uptick:
USDX weekly: the weekly candle was an indecision-style Doji:
EURX weekly: the EURX closed with a large bullish weekly candle and back above the 100 level.
Data: there is a lot of data next week to impact the US$ with the main event being Wednesday’s FOMC. There is also the Dutch election on Wednesday to factor into thinking here as an even that could shake up risk appetite. As well, three other Central banks report rate updates on Thursday: BoJ (JPY), SNB (CHF) and BoE (GBP).
Summary: The US$ index has failed to hold back above the recent resistance level of 102. Watch next week with FOMC to see if this level can be re-taken or if the 100 level is tested and gives way. Thus, the 102 and 100 levels remain the ones to watch next week with FOMC.
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