Forex Technical Update


Previous: USD Index Fails to Clear Support, Breaks Above Channel (5/2)

USD Index 1H chart 5/4/2012 3:43PM EDT


The US NFP release showed a disappointing 115K job increase in April, down from the already tepid 154K and missing estimates that have been scaling to 160K, and even 140K in some sources. The poor data did not have an immediately clear effect for the USD. However, after risk aversion filtered through, the USD was supported at a recent consolidation support as well as 200-hour simple moving average.

The RSI remained above 40 and tagged 70 after the dust settled reflecting a persistent bullish momentum in the 1H chart's time-frame.


Despite today's reaction, the daily chart shows that the market is still trading between rising and declining trendlines. Even if the market breaks out of the triangle, it is still within a range roughly between 78.10 and 80.75.

The daily RSI reading is also stuck between 40 and 60. Tagging 70 will be a sign of bullish momentum and should be seen with a break above 80.75 to open up a bullish outlook. Tagging 30 should accompany a break below 78.10 and the 200-day simple moving average to open up the bearish scenario.

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Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of >rex News, Analysis, Education, Videos, Chartsand other trading resources.<>pformation and opinions contained in this report are for educational purposes only and do not constitute an investment advice. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness. FXTimes will not accept liability for any loss of profit or damage which may arise directly, indirectly or consequently from use of or reliance on the trading set-ups or any accompanying chart analysis.