DXY: False downside break and reversal? - Signals a higher US$?
The DXY, having broken briefly below the 79.00/10 support, in making a quick spike low at 78.90 during Mario Draghi’s press conference on Thursday, has turned sharply higher to finish back above the 200 WMA (79.63) that has recently been acting as a pivot and now looks as though it could be in or further gains ahead.
We have yet to recover 80.00 though and descending trend resistance at 80.04 could yet cap it but the daily MACD’s have turned higher, and if we can make headway, then the 100 DMA (80.22) and then the 200 DMA (80.49) will be the obvious targets. Above here would see an acceleration of dollar strength, taking us on to 81.00 and possibly to 81.14 (38.2% of 84.75/78.90).
On the downside, the 200 WMA will again see bids at 79.63, below which 79.50 and 79.25 will provide support. I doubt we are heading back to last week’s 78.90 low, but if wrong, there will be strong support at the longer term 78.60 double bottom.
Buying dips in the dollar looks to be the way to go for the time being.
We have yet to recover 80.00 though and descending trend resistance at 80.04 could yet cap it but the daily MACD’s have turned higher, and if we can make headway, then the 100 DMA (80.22) and then the 200 DMA (80.49) will be the obvious targets. Above here would see an acceleration of dollar strength, taking us on to 81.00 and possibly to 81.14 (38.2% of 84.75/78.90).
On the downside, the 200 WMA will again see bids at 79.63, below which 79.50 and 79.25 will provide support. I doubt we are heading back to last week’s 78.90 low, but if wrong, there will be strong support at the longer term 78.60 double bottom.
Buying dips in the dollar looks to be the way to go for the time being.