The US$ is still adrift above a Bull Flag but below key 100 resistance. This indecision is rather frustrating for the impact it has across broader FX and so, if I could, I would rather like to stick some head phones on the index and subject it to this Eurovision UK winner hit for some key words of advice…..’soon you will find it’s time for……!’
There are conflicting technical signals here the FX indices and all on very little momentum which clearly spells that caution is needed with any directional FX trading. Add to this that the weak US ADP data is setting up for a potential bearish surprise with Friday’s NFP and this could be bearish for the US$.
USDX 4hr: seems to have cleared a potential Bull Flag but has not made much progress. It is stuck below the 61.8% of the recent pull back. Note the declining momentum though. It may remain like this until after the Easter break!
USDX 4hr Cloud: is trading just above the Cloud but not looking too convincing here just yet, especially as momentum is so low:
USDX daily Cloud: note the new bearish Tenkan/Kijun cross. The angles are not ideal for bearish sentiment but, then, they don’t conjure much bullish sentient at the moment either! However, any new bullish cross above the Cloud would be deemed a ‘strong’ signal and, with momentum, would be supportive of bullish continuation. This is surely something to watch out for but there are no such moves this way just yet.
EURX monthly: this index is still back below the 96 level:
EURX 4hr: note also the lack of momentum here. A bit of a warning for now:
EURX 4hr Cloud: some would read bearish continuation with the index given it is back below the 4hr Cloud and that may well be BUT I would prefer to see a move away from this region with momentum first:
EURX daily Cloud: there is a bit of a warning here too with a new bullish Tenkan/Kijun cross. This is also nothing to get too excited about as the angles do not support bullish continuation but, I would want to see a new bearish cross before being convinced of bearish follow through:
