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US Dollar Declines Offer Better Long Entries Ahead of Greek Elections

By , Quantitative Strategist
14 June 2012 15:46 GMT

ssi_table_story_body_Picture_8.png, US Dollar Declines Offer Better Long Entries Ahead of Greek Elections

The US Dollar (ticker: USDOLLAR) is likely to continue lower against the Euro and Japanese Yen on one-sided retail trader sentiment, but broader technical and fundamental forecasts favor buying major USD declines.

Our overall technical and fundamental forecasts for the US Dollar strength as we believe the Dollar Index set a significant bottom in February. That said, a short-term correction lower (EURUSD higher) is consistent with that view; any important US Dollar declines could offer better levels against which to get long.

Our technical forecasts for the Euro and other US Dollar pairs leave focus at Sunday’s USDOLLAR low of 10142 and EURUSD high of $1.2670. A hold of these levels leaves our US Dollar-bullish bias intact and would favor buying Greenback declines.

The weekend’s Greek election nonetheless offers substantial event risk, and caution is advised against holding large positions through Friday’s market close. Price action is notoriously difficult to predict and trade on major weekend event risk.

ssi_table_story_body_Picture_7.png, US Dollar Declines Offer Better Long Entries Ahead of Greek Elections

How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the SSI via e-mail and other reports from author David Rodríguez, e-mail subject line “Distribution List” to drodriguez@dailyfx.com; Contact David via Twitter at http://www.twitter.com/DRodriguezFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
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14 June 2012 15:46 GMT