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Talking Points:
- US Dollar Technical Strategy: Long via Mirror Trader USD Basket **
- Prices Break Four-Day Losing Streak, Hint at Upswing Ahead
- Bottoming Confirmation Absent Pending Close Above Resistance
The Dow Jones FXCM US Dollar Index is showing tentative signs of bottoming as prices carve out a bullish Piercing Line candlestick pattern, hinting a rebound may be ahead. The currency snapped a four-day losing streak that brought prices to a two-month low after clearing support guiding the near-term uptrend from mid-May swing lows.
Confirmation of a reversal is absent for now. Prices would need to overturn the series of lower highs and lower lows established from the August 7 high on a daily closing basis to reinforce the likelihood that a bottom is indeed in place. In the interim, the path of least resistance continues to favor weakness in the near term (although as noted previously, the longer-term tendency aims upward).
Near-term resistance is currently at 11892, the 23.6% Fibonacci expansion. A break and close above this barrier initially exposes the 38.2% level at 11956 as the next hurdle for upside momentum. Alternatively, a turn below the August 24 low at 11789 clears a path to challenge the June 18 bottom at 11732.
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** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
