Here’s What I Need To Turn Bullish On The Dollar
The upward revision to June’s NFP and the better than
expected NFP for July was sorely needed for dollar bulls. For now the dollar
index appears to have shaken off the selling pressure that was evident all week.
Both the 60 and 240-min charts have broken their down-trends and the daily
stochastics have also turned higher. Nonetheless, we want to see a few levels
cleared before we become more comfortable with an upward bias.
Key Levels for DXC:
88.73, 88.42, 88.28
AUD/USD & NZD/USD:
Both AUD and to a lesser extent NZD have fallen off in an orderly fashion
today, both breaking bull trend-lines thus exposing lower levels in the days
ahead but still have yet to take out support levels that we feel will result in
some fantastic gains for shorts.
Any minor rallies in AUD/USD towards .7685-90 should be viewed as excellent
short entry points. The next big support levels for AUD/USD is at .7630, .7610 &
.7567
NZD/USD – while it has not been as weak as AUD has today, the daily technical
backdrop on NZD/USD is much more negative as it never managed to trade back
above its’ 50 or 200-day ema. We suspect it is only a matter of time before NZD/USD
trades down towards .6680-.6700. A break of this support area should expose
lower levels for the remainder of the 3rd quarter.
Enjoy the weekend, and as always, feel free to send me your comments and
questions.
Dave Floyd is
President of Aspen Trading Group,
which provides research/trade ideas on the FX and equity markets as well as
analytical software. Aspen Trading Group is based in Bend, OR.