The Trend of the Day - USD/INX
The Dollar Index, composed of a basket of currencies weighted against the dollar, reached a new 20 day high.
Though breaking above its daily down trend line that stretches all the way back ot March of this year, the Dollar index is still trading far below its 200 simple moving average that sits around 79.73.
The dollar seems to have a 30 cycle of of rallying before dropping. Looking to July of 2009, we can see how the dollar rallied at the end of June
through the first week July and then fell for the rest of the month. In August of the same year, the dollar rallied and the majors sold off for the first part of the month and then moved down,
we can see that We may be coming to the end of this counter trend rally in the dollar. These beginning of the month peaks in the dollar always come with talk of a dollar reversal and the fall of the Euro.
With Stochasticstics in the overbought area, look for the dollar to turn down while Euro and the Aussi reverse there recent declines.
Look at the 1.4625 support area as a possible entry zone. If price fails to bounce there, then this could be more than just a repeat of a familiar cycle.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.