Watch this key level for the Dollar Index
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
Dave Floyd’s Daily Forex Alerts
Thursday’s FX Observations
The Dollar Index (DXC) is attempting to recover from a sharp sell-off
yesterday that negatively impacted the recovery that was in place early this
week. While some key support is seen at 88.80 – the overall trend is still
negative and we might only get a modest bounce towards 89.10. The chart
below summarizes our current thoughts.
As I mentioned to clients in my morning report today, the technical outlook
is in transition presently and we are trading lightly until the picture becomes
clearer. Nonetheless, we are watching some levels on the following pairs
for possible ‘counter-trend’ trades.
EUR/USD:
Broadly speaking, today’s move off the 1.2075 level to 1.2145 leaves EUR/USD
short of the 1.2190 ‘key resistance’ – a level which we still see as not being
attained in the near-term. While this view goes against the current trend – we
still see prices moving back towards 1.2095 in the next 12 hours.
Traders looking to fade yesterday’s move may find the 1.2145 level a good place
to pick up 20-30 pips on a pull-back with a tight stop-loss.
NZD/USD:
While the .6970 level still appears to be halting any further upside for the
time being, the lack of a reaction lower off this level, suggests that we may
need to look towards .7010 as the possible inflection point before some
meaningful pull-back gets under way.
As always, feel free to send me your comments and questions.