Greetings everyone….as you all know I have been bullish or at least neutral the Dollar for the last couple of weeks expecting a strong bounce towards 98.50-99 (Morning analysis here). The Dollar index is mainly moving sideways since mid May and we need a break above 97.50 to confirm a short-term at least reversal that will bring us towards 98.50-99.
The main drivers in the up coming bounce will be USDJPY and EURUSD. EURUSD is unable to reclaim 1.12 and with a double short-term rejection at the cloud resistance in the 4 hour chart, I believe it is only a matter of time before we break 1.11 towards 1.10-1.09.
USDJPY has broken above important trend line resistance and is heading towards the medium-term resistance at 112-113.
NZDUSD is also at a pivotal long-term resistance area around 0.73 with rejection signs as we have been pulled back twice….0.7180 is key support, if broken we confirm reversal.
USDCAD despite Oil’s decline has fallen towards a long-term support trend line. Will it move higher with Oil and confuse traders relying on its classical inverse relationship with oil? I believe so….
Posting bearish divergence signals and a double top at 0.7635, once the red upward sloping TL is broken (0.7590) we should expect to see it test the Kumo at 0.7540 at least.
In a bearish channel but no bullish divergence in the daily chart. One more new low could be at hand before a meaningful move higher above 1.30.
Can’t be more clear than this….I would not be bearish Dollar here…and I prefer short EURUSD and long USDJPY for the coming days.