I had warned last week that the US$ index looked like it might be undergoing a technically-based moved lower in spite of other flight to safety moves and this is what has evolved. Markets are roiling with Coronavirus but there are two clear technical patterns that have emerged on the FX Indices this week. Caution is needed in these volatile markets so traders need to manage trade size and risk appropriate to these conditions. Remember, Fundamentals will always trump Technicals.

DXY

DXY monthly: a small bullish monthly candle with a long upper shadow. I note that the 100 resistance level also aligns near a monthly bear trend line!

DXY weekly: note the bearish-reversal Evening Star style pattern:

DXY daily: I suggested 98 S/R might be a target and look where price reacted! Watch this level for any new make or break:

DXY 4hr: any relief rally would bring the recently broken weekly bear trend line back into focus:

EURX

EURX monthly: a bearish monthly candle but the 100 looks likely to hold:

EURX weekly: in Yin and Yang fashion, this chart reflect a bullish-reversal Morning Star pattern following this large bullish weekly candle:

EURX daily: watch for any new make or break at the daily 61.8% fib:

EURX 4hr: price is back above 100 but any weakness would bring the 4hr chart’s 61.8% fib into focus:

FX Index Alignment:

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

Calendar: Coronavirus remains behind the wheel for these markets but there are also two Central Bank updates and NFP worth monitoring next week: