Both FX Indices have given substantial follow-through following last weeks reversal patterns and both have broken through 26-month trend lines. The clues offered on the FX Indices over the last three weeks should have greatly helped EUR/USD traders; did any of you catch these moves? Friday’s NFP gave a decent print on the jobs added and wages front but did little to help the US$. Traders need to watch for any continuation with these reversal patterns but also need to be mindful of the potential for some retracement; trends do not travel in straight lines ad infinitum. There is the ECB rate update this week so watch to see how this impacts the run on the EUR$.

DXY

DXY weekly: great follow through after last week’s bearish-reversal Evening Star pattern. Note the break of the 26-month support trend line so watch for any push down to the 61.8% fib of this swing High move, circa 93:

DXY daily: price action is back below the daily Cloud and printed a bearish candle on Friday, despite the decent NFP print:

NFP: quite a good print but gave little help to the US$:

DXY 4hr: any relief rally here would bring the 4hr chart’s 61.8% fib, near 98, into focus:

EURX

EURX weekly: great follow through after last week’s bullish-reversal Morning Star pattern. Note the break of the 26-month resistance trend line so watch for any push up to the 61.8% fib of this swing Low move, circa 119:

EURX daily: price action is back above the daily Cloud:

EURX 4hr: any pause or pullback here would bring the 4hr chart’s 61.8% fib, near 110 S/R, into focus:

FX Index Alignment: the FX Indices are aligned for risk-on so watch to see if this pattern holds:

• EURX: is above the 4hr Cloud and above the daily Cloud so aligned for LONG EUR$ price action.
• USDX: is below the 4hr Cloud and below the daily Cloud so so aligned for SHORT US$ price action.

Calendar: watch to see how the ECB rate update impacts this latest run for the EUR$: