Technical observations of RossClark@shaw.ca
Following the daily capitulations in October, weekly Sequential Buy Setup on November 5th (resulting an ‘isolated low’) and bullish crossover of the 20-day over the 50-day exponential moving average in late November, the US Dollar Index has now found higher support in the rising trend. This week saw prices become oversold close to 50% retracement from the November lows (at the same point that the Euro retraced only 38% of its decline from November).
We have previously outlined the likelihood of resistance being found at the 55 and 89-day Bollinger Bands as the Dollar rallies out of lows. The 55-day caught the November 30th high. It would be normal for the next rally to achieve a move to the 89-day band, currently at 83.96.
(Click on image to enlarge)
Look for the 50-day ema and 100-day simple moving average to provide overhead resistance in the Euro.
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