Hope you are having a great holiday. Here is an abbreviated holiday column. This is the state of the state for the greenback. As you have seen in previous weeks, price action has been riding the lower rising median line and finally got tired last week. The green lines are not very representative of the action but have been instrumental in a couple of key tests. Most notably, price action failed at the lower green line on Christmas Eve. You can also see a tight channel line down to the first parallel warning line which also happens to fall in the same area as the 200-hour moving average. Prices gapped down in Sunday night action. As you know, the inverse relationship to stocks depends on this test. Taking this one step further, the USD/JPY is also at a very key mid line on a monthly chart. This is a test that could take several days. That being said, I think we could be all over the map this week. Tests of a mid line are very important and don’t usually play out in a day, especially when it is a holiday light volume series of days leading to the end of the year.
My regular column will resume next week. Happy New Year.