The DXY chopped around last week, consolidating in a 0.8139/65 range and looking as though we could be in for some more of the same ahead, although the daily MACD’s have now crossed lower to suggest that the immediate pressure may be to the downside for the dollar. That being the case, we could see a drift back towards 81.10/00, which I think should provide an opportunity to once again buy the dollar/index. Below the rising trend support at 80.95 would be a bit of a concern and suggest deeper losses towards the 200 DMA at around 80.40, but while the weeklies point higher – as they do – I don’t think this is on the cards for now.On the topside, the previous week’s high at 81.71 is the immediate target, although I doubt we are going to see it reach up here, for the next few days at least. It would probably take a more hawkish than expected tone from the Fed Minutes/Janet Yellen to do so, and that seems highly unlikely. If/when 81.70 can eventually be overcome, then look for a run up towards the 50% pivot of the move from 84.76 / 78.89 at 81.82, beyond which could well see an acceleration towards the 61.8% Fibo level at 82.51, albeit that this is well over the horizon right now.
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