US DOLLAR INDEX:
After setting a fresh 2008 high, the US Dollar Index has fallen back to a long-term internal trend-line at 76.03. Falling interest rates and a rebound in commodity prices have contributed to the Dollar's correction. This comes as no suprise, as the EUR/USD, which completed it's double-top objective at 1.4665, has now double bottomed and is currently back above it's 10-day MA near 1.48. Moreover, the USD/CHF & USD/JPY both failed to maintain key psychological levels (1.10/110), which led to USD/JPY to lose key support at 109.50 overnight. We remain cautiously optimistic with the US Dollar and will look to sell the EUR/USD at 1.4965 (former range top), where price-action is projected to meet the key 20-day MA. If long-term internal trend-line support with the US Dollar Index holds, then we recommend selling the EUR/USD on a break below the 10-day MA.
Strategy Summary:
SELL LIMIT EUR/USD at 1.4965, STOP LOSS at 1.5015, 1st TARGET 1.4665
SELL STOP EUR/USD at 1.4805, STOP LOSS at 1.4855, 1st TARGET 1.4665
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