FX Weekly Report

It is interesting to see that the Dollar Index broke an important trend-line and price action now has only barriers for support.

Most Dollar pairs are showing potential signs of  further reversal so it is difficult to access whether this is a trend change or just a pause in further USD weakness. I would suggest we may see prices struggle in a range for the beginning of the week and then the possibility of blow-off tops and bottoms on many pairs.

$Index

The price action has broken an important trend-line and is now subject to many possibilities.

EUR/USD

Some correction to start the week. I would expect at least one good push upwards riding on the momentum of the previous break-out; However I don’t have a sense of the target.

GBP/USD

Here, I wonder if a top is in place or just how close one is at hand. Still a push upward is not out of the equation.

USD/CAD

Here a bottom is likely to form soon. The question is if it will break the barrier at 1.1500

EUR/JPY

Is this a top or just a pause before further rise?

Frankly I am a bit puzzled be the price action at the end of last week. The key technical factors that I tend to watch are somewhat contradictory at present. As much as we are due for some USD strength, there are signs that some further weakness may also be at hand.

I think caution is called for and an expectation that a sudden swing in sentiment may be at hand in either direction.

USDIndx

Here where there is a technical gap and yet price action as seen in the last daily candle, suggest the opposite.

EUR/USD

Similar circumstance of opposing technical implications.

GBP/USD

Bumping up against a very important barrier of $1.50

USD/CAD

A little more follow through to the downside is likely but I would say the end of the run is near – Look for a reversal to form some time this week

EUR/JPY

An impressive reversal – How long can it go without a correction?

Overall it appears that there is still some taste for risk appetite. As much as I expect some re-tracement to start the week, the overall look of most daily charts suggest to me that we have a little more momentum towards USD weakness at this time.

Early last week I posted in my blog an Elliott Wave count that may be playing out. Please visit: http://blogs.fxstreet.com/disciplined/2009/04/20/possible-track-for-eurusd-longer-term/ 

Here are the charts for this week

USD/Index

There is a definite ‘technical ‘gap’ that is looking ripe to be filled.

EUR/USD

Retrace and continuation are more likely here than an outright reversal.

GBP/USD

A new daily high here could cause a triple top

EUR/JPY

Most recent Daily candle is more bullish then bearish but is not an outright rejection.

USD/CAD

More potential of CAD strength then weakness. (USD/CAD drop)

The Dollar has been stuck in a range for the last few weeks and is reaching a potential break-out point. The larger picture fundamentally suggest we should see a stronger USD. Not because they are in such good shape but should the EURO be holding up as well as it has? is really the question.

We are reaching an area where if broken, acceleration of USD strength could ensue. Having said that, we have not yet crossed over that point, however the break points should be strongly observed.

I would expect some retracement starting the week but I am looking for further USD strength as the main theme for the week.

Cheers

Dollar Index.

Ended the week very strong and suggests continuation.

EUR/USD

As with the index the strong finish to the week should result in a continuation, albeit following some retracement.

GBP/USD

The GBP has held up better so the action here may continue in a choppy manner

USD/CAD

Remember that of the G8 Canada has immerged as having one of the best banking systems and this may in turn cause the CAD to hold up better then the rest against the USD

EUR/JPY

This pair has broken out of it’s rising trend channel and may now be back on it’s way down

from the look of the charts, I would expect more corrective action this week. In particular I am very curious to see what the Loonie does this week as it has been gaining on the USD faster than the other majors. The action around it’s low on Friday should be watched closely.

USD Index.

Not much to go on.

EUR/USD

Friday’s low has been rejected. A little upside to start the week perhaps.

GBP/USD

Choppy price action suggest correction which (when complete) should give way to an upside thrust

EUR/JPY

Here we have a strong rejection which could be a potential top.

USD/CAD

The lower trend-line is an important pivot point

I’m not so sure of the current direction however there seems to be technical targets that suggest a little more Dollar weakness before the sentiment shifts.

USD Index

EUR/USD – My bias is to the upside but my conviction is not at all strong

GBP/USD – With the break of the trend-line the upside possibility is strong. However some retracement may happen first.

USD/CAD – It hard to tell if we will re-visit the lower trend-line however it seems to be the most reasonable assumption

Cheers and good trading

We are in the middle of a range now and it is difficult to establish an argument technically about where the currencies should move vis-a-vis the USD. My preference for now is to move to shorter term trading while waiting for the patterns to unfold this week.

Dollar Index.

Not at all clear on direction.

EUR/USD

A break from 1.3260 should provide direction

GBP/USD

Trend-line rejection seems strong

USD/JPY

I’m expecting one last thrust downward however I’m not clear if the pair has topped.

Cheers and may you have a prosperous week of trading.

Pierre

The view of the Dollar index is quite different this week compared to last. The question now is will this move continue or will we reverse once again towards Dollar strength. My view is that the lower trend-line may be a reasonable target however the price action getting there could be very choppy. This week could prove to be a mostly corrective affair with the EUR and GBP entering into fairly choppy price action.

USDIndx

There is a barrier around 82.20 that could be resistance this week

EUR/USD

The barrier of note here is 1.3850 at it may intersect with the descending trend-line

GBP/USD

The break of the 1.4675 area is important if the up-trend is to continue

USD/CAD

Strong rejection suggest the majority of the move down is likely over

Cheers and good trading

The focus over the last few weeks has been the USD index. The level at 87.35 is proving to be the place to watch for a break or re-tracement. As I prepared this post the price was right on that pivot point. I’m sure a very volatile move is about to take place in a retrace or break-out to the downside.

The price action is not yet revealing which way this should go from here. So stay aware and vigilant to what will happen in the coming 24 hours.

Cheers and good trading.

This week my focus is the USD index. The index represents the general value of the USD as measured against several other currencies. It is a good indicator of the general trend for the USD when patterns may not be so clear on other pairs. Then, if the Index provides a strong signal you can look for entry and stop levels on the  EUR/USD and GBP/USD pairs.

The current view offers the strong possibility that a top is in place and that we are headed down. The best place to consider becoming bearish the USD is below 88.00.

Remember that as the index goes down , the EUR/USD and GBP/USD will go up. Re-tracement is likely to start the week but I suspect USD weakness will be the predominant sentiment.