USDOLLAR Slides to 61.8% Fibonacci Level
Further to yesterday's article, the USDOLLAR has continued to decline. It now finds itself at the 61.8% Fibonacci level of its previous impulse move. This level overlaps with price support (green shaded horizontal) around the 12,290 level. The rotation of capital into bonds as well as short term notes is putting pressure on yields. This is the the catalyst for the lower USD. We note the positive correlation between the 2 Yr Treasury Bill and the USDOLLAR (red rectangle areas). However, we again reiterate that the RSI for the T-Bill is oversold (blue rectangle) and that it will need to normalize soon. This is likely to provide support for the greenback, which may provide a floor to further greenback weakness in the near term.
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