The USD has weakened a bit following dovish Fed comments that seemed to suggest US interest rates might stay lower for longer. The FX reaction for now seems rather mute as markets try to digest the meaning of these comments in light of previous FOMC statements. The USD reaction has not been strong enough to trigger a Flag breakout either up or down and so, as far as I am concerned, I think we remain in a bit of USD ‘limbo’.
USDX daily: still no clear sign as yet whether this will evolve into a ‘Bull Flag’ or bearish ‘Double Top’:
USDX 4hr: no Flag breakout out yet. I’m still looking for a bullish break of 95.50 or bearish break of 92.50 to be more certain about the next major directional move here though anyway:
EURX daily: the potential for a Bear Flag is still open here:
EURX 4hr: watching for any trend line break clues here too:
US Stocks: Some analysts are noting with emphasis that the S&P500 and DJIA closed lower BUT I prefer to point out that the NASDAQ and Russell 2000 closed higher! The S&P500 closed slightly lower for the day but the NASDAQ closed higher and held above, not only 4,800 but, 4,900 as well! The Russell 2000 also closed higher and is still above the 1,220 ‘resistance turned support’ level:
Gold and Silver: these have both put in a bit of a bounce off support for now but may stand to benefit further from this latest Fed direction:
Silver: has bounced up off a recent support trend line (pink) and reacted at a major monthly trend line.
Gold: bounced up off $1,200 and trend line support. More to come?
TC Signals: there were two TC signals noted yesterday that I had suggested to avoid. However, both seem to have closed off now anyway.
U/J 4hr: look where the U/J pulled back to! Yep….that 118.5 level …..again!
A/J: down and out!
Other FX:
E/U: becoming squeezed into the apex of a 4hr triangle. Watch for any breakout with increased momentum:
E/J: still under the 136 level but above support:
A/U: higher with the weaker USD and so watch for any break and hold above 0.785:
Cable: also higher with the weaker USD and last night’s upbeat GBP data. Watch for any break and hold above the daily Cloud:
G/U 4hr: Gave a 4r triangle breakout. I am still long here from the earlier failed TC signal.
G/U daily Cloud: any close and hold above the daily Cloud would have to be viewed as bullish. Watch the top of the Cloud and the 1.55 region for reaction:
Kiwi: also higher ahead of NZD PPI data. A test of 0.77 might be on the way:
Loonie: range bound in a triangle for now:
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