-EURUSD, AUDUSD, and NZDUSD remain ‘close to the mean’
-GBPUSD no longer considered in downtrend
-USDCAD still considered in uptrend
[B]About the DFX Trend Index
[/B]
The DFX Trend Index ranges from -100 to +100 and is updated everyday at 5 pm eastern US time. On the charts, bars are painted blue if the index is above 50 (uptrend) and red if the index is below -50 (downtrend). Readings between -25 and +25 result in a green bar to indicate that price has reversed to the mean. The spreadsheet shows the index values for the last 15 days.
50 to 100: uptrend / potential for a top increases the closer the index is to 100
25 to 50: in a range / bullish potential
-25 to 25: price has reversed to the mean
-50 to -25: in a range / bearish potential
-100 to -50: downtrend / potential for a bottom increases the closer the index is to -100
[B]
EURO / US DOLLAR[/B]
The trend index is at 16, which indicates mean reversion. Last week was the first time since 1/12 that the index was not negative.
[B]
BRITISH POUND / US DOLLAR[/B]
The trend index is at -48, which indicates range / bearish potential. The recent trends has been up and the GBPUSD is advancing from the lower end of a range, so the downside seems unlikely.
[B]
AUSTRALIAN DOLLAR / US DOLLAR[/B]
The trend index is at 15, which indicates mean reversion. Mean reversion warns of a breakout. In this case, the AUDUSD has broken above trendline and structural resistance, so the upside is favored.
[B]
NEW ZEALAND DOLLAR / US DOLLAR[/B]
The trend index is at 11, which indicates mean reversion. The interpretation is the same for the NZDUSD as for the AUDUSD. Be aware that there is potentially strong resistance at .5450 and .56.
[B]
US DOLLAR / JAPANESE YEN[/B]
The trend index is at 90, which indicates uptrend / potential for a top. The USDJPY is topping but it is unclear if a new high will be made prior to additional weakness.
[B]
US DOLLAR / CANADIAN DOLLAR[/B]
The trend index is at 59, which indicates uptrend. Continued strength is favored as long as price is above 1.2350.
[B]
US DOLLAR / SWISS FRANC[/B]
The trend index is at 36, which indicates range / bullish potential. Last week’s surge (over 400 pips) made a mess of structure. It is worth noting though that such spikes tend to mark the end of a move more often than the beginning of a move.
Jamie Saettele publishes Daily Technicals every weekday morning (930 am EST), COT analysis (published Monday mornings), technical analysis of currency crosses throughout the week (EUR on Tuesday, JPY on Wednesday, GBP on Thursday, AUD on Friday), and the DFX Trend Index every day after the NY close. He is also the author of Sentiment in the Forex Market.
Please send comments about this report to <[email protected]>