The US$ index closed higher for the week but has failed to breakout from the consolidation pattern it has been trading within for the last 6 weeks. There was some flight to safety movement on the back of US Covid stimulus concern but some positive Vaccine news out of Pfizer on Friday pegged those gains. The rate of Covid infections is rapidly increasing in the USA and Europe though so this will be a situation in greater focus in coming sessions. The wait for a momentum breakout continues. Forex traders are reminded of the fact that the FX Indices are not aligned and so Forex trend trading is likely to be choppy; something we have seen for the last few weeks.

DXY

DXY weekly: the DXY closed with a bullish-coloured, albeit almost Inside, weekly candle reflecting some indecision as the index struggles within a consolidation triangle and under the recently broken 10-yr support trend line. This previous Support has now become Resistance.

DXY daily: note the lack of momentum on this time frame so watch for any momentum-based trend line breakout:

DXY 4hr: declining momentum BUT a Bull Flag here on the 4hr chart?

EURX

EURX weekly: the index closed with a bearish weekly candle BUT still within a potential Bull Flag and still above the recently broken 12-yr trend line:

EURX daily: note the lack of momentum here too on this time frame so watch for any momentum-based trend line breakout:

EURX 4hr: not much momentum here either BUT watch for any momentum-based trend line breakout:

FX Index Alignment: the FX Indices are not aligned at the moment.

• EURX: is below the 4hr Cloud but in the daily Cloud so currently not aligned and prone for potential choppy EUR$ price action.
• USDX: is above the 4hr Cloud but in the daily Cloud so currently not aligned and prone for potential choppy USD$ price action.

Calendar: watch also for updates on the US Covid Stimulus negotiations and global Covid infections.