To receive Ilya's analysis directly via email, please SIGN UP HERE
- US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
- Support: 10375, 10323, 10249
- Resistance:10404, 10434, 10495
The Dow Jones FXCM US Dollar Index may have initiated a substantial downward reversal after prices broke below a trend guiding the uptrend since July 2011. Sellers are now testing the 10375-79 area, marked by a double bottom and the floor of a falling channel set from early June. A daily close below this barrier would initially expose the June 2012 high at 10323. The trend line – now at 10404 – has been recast as near-term resistance. A move back above that clears the way for a test of the channel top at 10434.
While the breakdown is an ominous sign for our long-term outlook favoring US Dollar strength, it seems prudent to wait for confirmation on a break of the double bottom before bailing on the trade. With that in mind, we remain long via theMirror Trader US Dollar currency basket.
Daily Chart - Created Using FXCM Marketscope 2.0
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com