EURUSD and DXY confirming signal of change in trend for dollarEURUSD EURUSD and DXY
EUR is tracking an inverse set of parallels to DXY. When EUR
breaks lower it's a second sell/add shorts signal which must be
confirmed by DXY breaking above the upper parallel
containing this impulse wave from inception.
DXY has to break and hold above that parallel before the
bears will back off - but it's fighting here, where it should if
it's to turn back up from here. The confirming signal is the
break above the upper parallel.
DXY Dollar Index
Despite the spike and noise surrounding CPI numbers
yesterday DXY has been forced back down the same small
parallels it was travelling down before the numbers hit the
newsfeeds. As in last comment Dollar bulls still have the
double bottom on their side here. The last one was one week
apart, this one is 2 weeks apart. The Dollar is likely to hold
here at these lower levels and then begin to rally. It's waiting
on Wall St to open now but bears in London have failed to
push it below the double bottom. A sign of waning downside
momentum. Once it can break above the upper small parallel
guiding the descent it should attract more buyers and move
back up to test the 89.37 line where it will likely meet
resistance again...it has to push on through here during the
course of today for the bulls to gain more traction and flip
DXY into more positive mode from this point. This battle may
take some time to resolve - DXY has to fight its way through
three lines of near term resistance at 89.37, 89.51 and then
89.62 to turn back to positive again. Look to buy dips here
and on the pairs with stops under 88.40 on DXY for small loss
if wrong from here. Increase longs on move above the smaller
upper parallel.
On downside, DXY will have to break below 88.40 today to
change this view to near term negative but only back to 87.70
at lowest where DXY should find final support and begin to
rally again. But so long as 88.40 holds up today the Dollar's
downtrend is finally coming to an end.
