The US Dollar Index spiked below 71.86 (May trough) reaching 71.31 (daily pivot) on Tuesday. Wednesday’s reversal day ended a series of intra-day lower high’s and since clearing former channel support at 72.14, the 10-day average has been probed (currently at 72.32). We continue to recommend shorting the US Dollar while trading below the 10-day for a possible re-test of 71.31, if platform support at 71.86 is lost. If the EUR/USD loses its 20-day support (currently at 1.5798) and if the USD/JPY can reclaim the 200-day (currently at 107.11), this will thrust the US Dollar Index through a cluster of moving averages (10, 20, 100-day) and shift momentum towards the 200-day moving 74.44
Strategy Summary: SHORT USDX AT 72.40 FOR 71.86 (1st TGT) 71.50 (2nd TGT), STOP AT 72.40 (REVISED)
LONG EUR/USD FROM 1.5816 FOR 1.5890 (1st TGT) 1.5932 (2nd TGT), STOP AT 1.5772 (REVISED)
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