The USDX continues its slow march upwards and is heading towards the region of a recent high. This poses potential ‘Double Top’ resistance for the index before the big kahuna level of 90. All eyes must be shifting to the EURX though for now. It is looking poised to embark on a massive move lower.
USDX:
USDX 4hr: the pace has slowed here now as there is certainly some heavy lifting to be done. Two major barriers remain in the way of the index: the 89.50 and then the 90 level:
USDX weekly: this chart puts the recent bullish move in perspective. There is still the chance that price could reverse off the 90 level but there isn’t any clear indication of that happening just yet:
USDX weekly: my charting program USDX chart contains more history and shows how any bullish break above 90 would suggest targets of 100, 110 and the 120:
EURX
EURX daily: the daily candle has yet to close here BUT it is looking like it will close below the Bear Flag trend line:
EURX weekly: I have been noting over recent weeks how this chart was starting to look like a developing Bear Flag. The Flagpole here is over 500 pips and this suggests that any break of the Flag would have the index move down a further 500 pips. This would bring the index down to near the 102 level:
EURX monthly: any Bear Flag move down to the 102 region would help to develop another pattern I have been seeing form up on the monthly chart over recent months. That is, a bullish ‘Inverse H&S’ pattern:
Summary:
- I am watching the EURX for any close below the Bear Flag lower trend line for a potential move down to the 102 region.
- I am watching the USDX for any close above the 89.50 and, then, 90 levels.
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