Where does the Dollar go from here?
Dave Floyd is a professional FX and stock trader based in Bend, OR and the
President of Aspen Trading Group. Dave’s approach to FX combines technical
and fundamental analysis that results in trades that fall into the swing
trading time frame of several hours to several days. For a free trial to
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This week’s move lower in the Dollar Index (DXC)
has been dramatic. Naturally the question remains, do we go lower from here?
While this is certainly the ‘higher probability’
outcome, a pull-back/rally would be the better scenario from which to establish
short positions. The current technical backdrop (i.e. oversold) makes
establishing all but longer-term shorts a bit risky.
The hourly chart of the DXC below highlights the
present technical picture. The inverse Head & Shoulders suggests that a break
above the 88.20-30 level should allow for a move back towards 88.45-60 is not
out of the question. Combine that with a bullish RSI divergence and oversold
stochastic on the daily chart and as mentioned above, shorts here are a bit
tricky.
We continue to remain very selective as trading
conditions have been tricky, we are however short AUD/USD expecting to see a
move lower back towards .7480-90.
Some other key levels we are watching for are as
follows:
EUR/USD: 1.2225 & 1.2330
GBP/USD: 1.7840 & 1.7920
USD/CHF: 1.2585 & 1.2690
As always, feel free to send me your comments and
questions.