We are coming to an interesting zone of strong support. DXY has been retreating over the course of this year.
The only thing that will save the dollar will be ECB and how they jawbones the currency, given eur makes up a huge percentage of the DXY.
Will need to be careful of potential bounces and manage risks accordingly. Best to wait for convincing breaks to change bias.
Expecting some recovery on the DXY given the strong moves last week. Key area of interest will be 96.50 area.
If It breaks and close above still need to clear 96.80 region of previous triangle.
Overall still bearish on the USD.
Highlight area shows the range on a weekly and major areas to look at
Based on the fib extension we are looking for a correction towards the trendline. 61.8 overextended towards 78.6
I will be looking for shorts from here.
This is a tricky pair given the recent GBP strength.
Considerations for short
- Double top rejection (daily)
- Weekly trend line to the downside intact / Daily top rejection
- JPY pairs reacting to Nikkei topping out. Due for correction.
Trend is still bullish
-Price still above 200MA / EMA still pointing up
-Weak DXY chance of further capitulation if Trump tax plan fails to impress
- Positive data pull along with Europe
-Optimism high on UK data and politics
target 1.31 Topside TP1
Price below 200 EMA
Likely gap down when open.
Geopolitical risk adversion bias to the downside.
Bad US data drop will amplify when liquidity comes in to fuel the move.
Likely will see some channel movement till breakout