Forex Technical Update
USD Index daily chart 5/2/2012
The daily USD Index chart shows a market that has been flattened after a rally from Aug. 2011 to Jan. 2012. In April, the market fell from about 80.40 down to a previous support pivot near 78.80. As it tested this support, it also tested a rising trendline that went back to the August 2011 lows. Failure to clear these support factors keeps the USD Index directionless as it consolidates ahead of two key events - Thursday's ECB interest rate meeting and Friday's US Non-Farm Payroll data. Note that direction beyond the short-term is not clear until either a break above 80.75 or below 78.10.
USD Index 4H Chart 2:35PM EDT 5/2/2012
The 4H chart shows a market that has broken above a declining channel. However price has not cleared the previous resistance pivot, and the RSI reading has not cleared 60. These are signs that the market is at best sideways at the moment following April decline. However if the market can stay above 79.00 after the current throwback is complete, there is still a chance for the bullish development. Falling below 79.00 reopens the lows near 78.70 and keeps the market sideways to bearish.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist of FXTimes - provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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