The DXY has made it to the important resistance at 85.20 (76.4% of 89.59/72.70) which is also strong trend line resistance, joining the tops from March 2009/May 2010, so some caution may be warranted, as this level will not easily give up its ground.
However, the weekly MACDâ€™s remain positive, and if we do head higher, the next Â meaningful resistance is not seen until we reach the 29 June 2010 high at 86.30 (weekly chart below) followed by the April 2009 high at 86.87. Above here would head up to the major descending trend resistance reaching all the way back to February 1985 at 164.72 and joining the Feb 2002 top at 120.51, now at around 87.85, which again should be very strong, but beyond which could see a quick run to the 7 June 2010 high at 88.70, from where it collapsed, eventually to 80.08 by August 2010.
The dailies though, are now becoming overbought, so while the dollars uptrend remains firmly intact, we could see an easing up in the momentum and possibly a bit of a dip back towards the previous long term top at 84.75. Below this would head back towards 84.00/10 although I donâ€™t really see it yet, and if it does get there it would present another opportunity to sell the Euro at higher levels.
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