22 Jul 2013
US Dollar Index scrambling to regain short-term footing above 82.42 support
FXstreet.com (Barcelona) - The DXY is barely holding on to short-term support of 82.42 after the recent sell-off that started with Ben Bernanke’s dovish comments back on July 10th. Seemingly only an oversold condition is keeping the DXY from dropping further right now.
Euro strength and potential trouble for US investment banks have the DXY slipping again Monday
The US Dollar index remains perilously close to short-term support at 82.42 after news-induced rallies in the euro and the Yen combined with the prospect of more Fed easing (to ease concerns about the stability of the financial system following rumblings about looming trouble for US investment banks) are all contributing to continued pressure on the greenback. This current decline in the DXY started with the post-close speech given by Ben Bernanke back on 7/10 where he re-affirmed the Fed’s commitment to step in as support for the anemic economic recovery in the US.
Tech outlook for DXY
Technicians like Tim Thielen of The Sea Change Report are calling for an eventual move in the DXY down to around the 80.71 level before the current downside correction is over. The question in his and other technicians’ minds is whether there will be a modest bounce prior to the big move lower to work off a short-term oversold condition. Short-term resistance for the DXY comes in at the closing high from 7/15 of 83.04 with the intraday high from that same day at 83.46 just above that. Short-term support for DXY comes in at the afore-mentioned 82.42 and the intraday low from 7/17 at 82.36 just below that. A break below those levels will likely lead to tests of 81.48 (the 5/1 closing low) and eventually 80.7 (the support for what Thielen is calling an “abc” correction to the downside).
Euro strength and potential trouble for US investment banks have the DXY slipping again Monday
The US Dollar index remains perilously close to short-term support at 82.42 after news-induced rallies in the euro and the Yen combined with the prospect of more Fed easing (to ease concerns about the stability of the financial system following rumblings about looming trouble for US investment banks) are all contributing to continued pressure on the greenback. This current decline in the DXY started with the post-close speech given by Ben Bernanke back on 7/10 where he re-affirmed the Fed’s commitment to step in as support for the anemic economic recovery in the US.
Tech outlook for DXY
Technicians like Tim Thielen of The Sea Change Report are calling for an eventual move in the DXY down to around the 80.71 level before the current downside correction is over. The question in his and other technicians’ minds is whether there will be a modest bounce prior to the big move lower to work off a short-term oversold condition. Short-term resistance for the DXY comes in at the closing high from 7/15 of 83.04 with the intraday high from that same day at 83.46 just above that. Short-term support for DXY comes in at the afore-mentioned 82.42 and the intraday low from 7/17 at 82.36 just below that. A break below those levels will likely lead to tests of 81.48 (the 5/1 closing low) and eventually 80.7 (the support for what Thielen is calling an “abc” correction to the downside).