Article / 29 March 2017 at 4:58 GMT

Chart bites: USD index retests head-and-shoulders top

Trader / Saxo Capital Markets Pte Ltd
Singapore
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  • USD index attempts to retest Head and Shoulders neckline
  • EURUSD is back below 1.0830
  • A gold correction would tie in with an upside move in US dollar index 
  • A close above 111.6 for USDJPY would open up a bull case
  • Symmetrical triangle patterns in S&P500 and FTSE suggest more legs in rally 


By Edmund Liu

US dollar index

We have a classic Head & Shoulders top on the USD index, but it seems that the index is not content to follow the rules of technical analysis, as it attempts to retest the Head & Shoulders neckline.

USD index daily chart
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EURUSD

We are back below 1.0830, which was the resistance levels in Dec 2016 and Feb 2017. We require further confirmation to see if the EURUSD retracement is temporary.

EURUSD daily chart
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XAUUSD

Gold is encountering resistance at the 200-day moving average, as well as downward sloping trendline resistance from 2016. A correction in gold would tie in nicely with an upside move in the US dollar index.

XAUUSD daily chart
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USDJPY

USDJPY appears to be retesting the horizontal support line of its Descending Triangle, a technically bearish pattern. A close above 111.6, as well as a close above the Ichimoko Clouds at 115, would open up a bull case for the USDJPY.

USDJPY daily chart
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DAX

With an upside reversal of risk trends last week, the DAX has reclaimed the rising wedge, suggesting that high can go higher.

DAX daily chart
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CAC

New highs on the CAC, a breakout of the rising wedge with a close above 5075 today would open up the bull case for equities.

CAC daily chart
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S&P500 and FTSE

Symmetrical triangle patterns in the S&P500 and FTSE suggest there are still legs in the equity rally.

S&P500 and FTSE daily charts
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Light Sweet Crude Oil

Crude is currently testing the 200-day simple moving average (SMA). A daily close above could just be the catalyst for a crude oil rally, as the RSI indicator suggests that momentum is oversold.

Light sweet crude daily chart
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 All charts Saxo Bank. Create your own charts with SaxoTrader; click here to learn more.
 
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– Edited by Susan McDonald

Edmund Liu is a trader on TradingFloor.com .

2y
Market Predator Market Predator
Hello Edmund, maybe no perfect H&S at DX could be explain as touch of the channel "?" I like your charting. If only guys from Australia office could give in their daily report the same graphic resolution as you. All the best, MP.
2y
Edmund Liu Edmund Liu
Hey Predator, thank you for your chart, I like it. Indeed according to your chart it is on an uptrend channel on the weekly chart. Thank you for your support for all of our Saxo publications.

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