We discussed yesterday how the DXY was forming a bull channel, and was likely to break down to the 50% Fibonacci retracement of the channel length. That is exactly what we saw, and we smashed through our profit target at 96.04 (which coincided nicely with the psychological level 96.00). The 96's did little to provide support and we ended up finding support at our trusty level of 95.82. Currently we are seeing a lift from this level and have trekked back to 96.24, where we are seeing a red triangle form on the KRI suggesting some resistance. It is likely for the dollar to range between these two levels at least until CPI and Michigan Sentiment data come through tomorrow. If not, watch for further support at 95.52. If we break out there is a cluster of levels in the 96 handle to provide resistance at 96.45, 96.56, and 96.65.
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