US Dollar Technical Analysis: All Eyes on Trend Line Support

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Talking Points:

• US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
• Support: 11734, 11648, 11509
• Resistance:11888, 11983, 12077

The Dow Jones FXCM US Dollar may be readying to turn lower after producing a bearish Evening Star candlestick pattern. Negative RSI divergence reinforces the case for a downside scenario. A daily close below the intersection of the 14.6% Fibonacci retracement and a rising trend line at 11734 exposes the 23.6% level at 11648. Alternatively, a reversal above the 11854-88 area marked by the March 2009 high and the 38.2% level opens the door for a challenge of the 50% Fib at 11983.

We remain broadly bullish on the US Dollar against its leading counterparts in line with our long-term fundamental outlook. As such, we remain long via the Mirror Trader US Dollar currency basket.

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Daily Chart - Created Using FXCM Marketscope

** 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