DXY looking in danger of heading a lot lower, Euro higher.
The Dollar Index (DXY), having made a false break to the to topside at the end of last week, has reversed aggressively and is now back below the 200 WMA (79.73) and appears set to test the recent low at 79.26. There is decent support there and again at 79.00-10. However a break of this would head quickly to 78.85 and then to the double bottom at 78.60, below which could be a bit of a black hole for the Index, with little support seen ahead of the Feb 2012 low at 78.09 and then the 61.8% Fibo support down at 77.24.
If the support above 79.00 holds then we could see a near term squeeze to back above 80.00, although the weeks high of 80.45 currently looks well out of reach, with both the daily and weekly momentum indicators looking soft.
Given that the Euro makes up 57.6% of the basket, this looks set to lead the way in keeping the dollar under pressure, and the charts tend to suggest that this time around, we could see a run to 1.4000, above which, there is not too much resistance until 1.4240.
Go to fxcharts.com.au for a full daily outlook.
Buying dips in the Euro seems to be the plan.
If the support above 79.00 holds then we could see a near term squeeze to back above 80.00, although the weeks high of 80.45 currently looks well out of reach, with both the daily and weekly momentum indicators looking soft.
Given that the Euro makes up 57.6% of the basket, this looks set to lead the way in keeping the dollar under pressure, and the charts tend to suggest that this time around, we could see a run to 1.4000, above which, there is not too much resistance until 1.4240.
Go to fxcharts.com.au for a full daily outlook.
Buying dips in the Euro seems to be the plan.
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