Tuesday FX Outlook
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Dollar Index (DXC):
Looks like our target of 86.03 may still take some time to
develop as intra-day time frames are extended/oversold. We expect a bounce
towards 84.30-40 will be well contained before another re-test towards 86.03.
Note that the weekly DXC chart is now turned lower as indicated by a 20,2,2
stochastic. Again, while expect some near-term pressure on DXC, we are not
expecting any major reversal and would still lean towards being long the dollar
over the next week or so. In the meantime, we are happy to short these rallies
until a clearer bullish picture emerges. Tommorow’s Durable Goods data will
likely provide short-term direction.
GBP/USD:
Our target price of 1.8325-40 was achieved as the dollar
continues its pull-back. The question remains, is there more upside?Â
Look for some support/new long entries in the 1.8290-1.8300
level with our new target price of 1.8365 as the goal.
AUD/USD:
Our target of .7600 and then the revised target of .7640 were
both achieved yesterday. Like the GBP/USD however, we feel confident that we
caught the lions share of the move for now and will possibly look to buy any
pull-backs.
As always, feel free to send me your comments and or
questions.