Forex: US Dollar Technical Analysis – Prices Drop Most in 6 Months
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- US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
- Support: 10495-500 (Mar 19 low, 38.2% Fib exp.), 10488-70 (channel floor, 50% Fib exp.)
- Resistance: 10573 (channel top), 10595 (38.2% Fib ret.)
The Dow Jones FXCM US Dollar Index plunged through multiple levels of chart support to post its largest one-day decline in six months. Sellers are now aiming to test the 61.8% Fibonacci expansion at 10439, with a break below that exposing the 76.4% level at 10401. Alternatively, a bounce above the 50% Fib at 10470 aims for falling channel floor support-turned-resistance at 10478, followed by the 38.2% expansion at 10500.
Looking past near-term volatility, our long-term fundamental outlook continues to favor a stronger US Dollar in the months ahead. As such, we continue to hold a long position via theMirror Trader US Dollar currency basket. **
Daily Chart - Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com