The dollar looking for support after the housing number miss
It seems to be the theme lately for the U.S. Dollar…another bad piece of data sending the already weakened dollar lower.
However, today’s test of the 78.939 low will be telling as buyers have been consistently support the 78.00 level and even the temporary dip to 77.65 was reversed the very next day showing a lack of selling pressure at these depths and buyers scooping the cheap dollar.
The current range on the dollar has been frustrating as the follow-through on intraday set ups has been stifled by the 78.33 – 78.36 resistance and the 77-939 – 78.00 support.
The EUR/USD which has on two previous occasions hit the 4.4240 area on the 79.00 tests on the dollar doesn‘t seem to be able to find support above 1.4220.
The USD/CHF has not sold off with the U.S. Dollar Index weakness as the 1.1800 is still support this morning.
With crude oil touching record highs again this morning the dollar is unlikely to find its way through 78.33 and it’s likely prices will remain range-bound.
Crude oil inventories are due out this morning and will likely settle the battle between the bulls and bears at 88.00. 88.00 remains resistance as prices have pierced this level but not yet found support above it.
With the lower housing starts the discussion for more rate cuts becomes more a headline again. The cheaper dollar has certainly helped many companies as earning this week have shown.
Two set ups this morning that look promising are the EUR/JPY and the EUR/USD.
Raghee Horner is a private forex, futures, and stock trader based in South Florida. She is the author of two best-selling forex trading books and a sought after speaker. All charts we used with permission from Autochartist and EZ2Trade Software. For a 21-day trial of Autochartist chart pattern recognition and scanning software, visit www.autochartist.com.