The uptrend neckline of this head and shoulders is now toast and the bias is obviously negative. Net USD positioning has moved into negativity territory for the first time since May 2014, which was roughly when EURUSD topped. https://pbs.twimg.com/media/Cgzbob6WgAAdnbF.jpg:large USD looks set to surge.
- Finally approaching that uptrend line from 07/12, any break and close below could lead bulls to question their positions. - There is potential for a range here from 1.3480/1.3500 - 1.3700. - RSI oversold, MACD Histogram on its way back to 0? - EZ CPI data tomorrow with any surprise being decisive for the pair.
- After failing to break above the cloud has moved lower. - Confluence of support between 09/13 high (100.60), 200DMA currently @ 100.24) and uptrend line from 06/13 (Currently rising from 100.20). - If all this is passed then I would be looking for support @ the 100.00 handle which is psychologically key for Japan. - Any convergence of the 200DMA and the 100.00 ...
- Since becoming support in May 2012 the 78.70 level has been solid. - You now have a H&S set up on the weekly with the 50% retrace as the neckline. - If this confluence of support is broken on the weekly chart it would be very bearish for USD. - Very possible we could bounce from this level as it will be well defended.
- Closes the week below up trend line from 2012 and the 200WMA. - MACD giving negative cross - H&S formation with the neckline @78.60. - Fundamentally the real question is was the weather really to blame for all of that bad data and will super dove Yellen continue to taper in the face of a softening economy?