US DOLLAR INDEX:
The US Dollar Index briefly probed the 77.35-85 region (December and January peaks) to set a fresh 2008 high. More importantly, the EUR/USD has completed it's double top objective (1.4670) and managed to recover to the 10-day MA (1.4803) after double-bottoming in the mid 1.46 region. Extreme oversold readings and negative hourly diverging studies, along with falling treasury yields and a rebound in commodity prices, all contributed to profit-taking in the US Dollar. We maintain our bullish bias towards the Greenback while above long-term internal trend-line support near 76.00 and if the USD/CHF & USD/JPY can maintain key psychological levels (1.10/110).
The US Dollar Index briefly probed the 77.35-85 region (December and January peaks) to set a fresh 2008 high. More importantly, the EUR/USD has completed it's double top objective (1.4670) and managed to recover to the 10-day MA (1.4803) after double-bottoming in the mid 1.46 region. Extreme oversold readings and negative hourly diverging studies, along with falling treasury yields and a rebound in commodity prices, all contributed to profit-taking in the US Dollar. We maintain our bullish bias towards the Greenback while above long-term internal trend-line support near 76.00 and if the USD/CHF & USD/JPY can maintain key psychological levels (1.10/110).
The US Dollar Index Strategy Summary: LOOK TO BUY USD (SELL EUR/USD)
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