The US$ has bounced up off some technical support late last week and this was conveniently assisted on Friday by a bit of a Brexit Poll-inspired ‘risk-off’ shift. With FOMC and BoJ next week and the Brexit vote the week after we could be in for a couple of weeks of this kind of back and forth activity. However, if recent Broker messages are anything to go by, sharp moves are to be expected with the Brexit Poll result.
NB: It is a long weekend in Australia this w/e and so my other w/e Forex analysis post won’t be published until Monday or even possibly Tuesday.
USDX:
USDX monthly: The Flag pattern and range-bound trading continues in the lead up to FOMC, BoJ and the Brexit vote. Will one or the other trigger a breakout from this range?
USDX weekly: the index has been ranging between 100 and 92.50 for 18 months now and 92.50 support kicked in late last week. The levels to watch in coming sessions remain as 92.50, 95.50 and the 100 level.
USDX weekly Cloud: support also came from the bottom of the weekly Ichimoku Cloud:
USDX daily: the first three days of the week were bearish but technical support and Friday’s Brexit Poll resulted in bullish trade on Thursday and Friday:
USDX daily Cloud: price action has edged back above the Cloud:
USDX 4hr Cloud: price action is just below the 4hr Cloud:
EURX:
EURX weekly: a bearish week ahead of FOMC and the Brexit Poll, both of which will impact this index:
EURX weekly Cloud: price is in the weekly Cloud:
EURX daily Cloud: price is below the daily Cloud:
EURX 4hr Cloud: price is in the 4hr Cloud:
Summary: there was a ‘risk off‘ shift towards the end of last week which was assisted by technical support on the US$ index but also by Friday’s latest Brexit Poll that revealed recent sentiment as a 55% result to the LEAVE camp. A bit of profit taking seems to have dominated on Friday following this news which isn’t surprising given that the major US stock indices are trading near 2016 HIGHs.
Ichimoku Cloud: the Ichimoku Cloud situation for both of the Forex indices suggests further choppiness given:
- the USDX: is trapped within the weekly Cloud and trading either side of the 4hr and daily Cloud:
- the EURX: is trapped within the weekly and 4hr Cloud.
I’m still watching for any US$ breakout from the 100 – 92.50 trading range and there are a few economic news events in the next two weeks that could help trigger a reaction here:
- next week’s FOMC. Keep an eye on the BoJ update as well though too.
- the following week’s Brexit Vote.
Technical trading is rather challenging in the midst of such major fundamental news events, to say the least, but there are key levels to watch on the US$ index for guidance. These levels include the 92.50, 95.50 and 100 S/R levels and the bottom of the weekly Ichimoku Cloud.
The post US$ finds some support ahead of FOMC, BoJ and Brexit Poll. appeared first on Trade Charting.
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