US Dollar Index (DXY) strength is continuing this morning for a 5th straight day, we’ll have to see if it can maintain or even further along following the release of NFPs. A close above 98.54 puts the index in open space to trade towards the October 1 high at 99.67 and the 100-line. There will likely be some bumps along the way as volatility remains low and keeps price action choppy, but the general trading bias is for more USD strength.
US DOLLAR INDEX (DXY) DAILY CHART (TREKKING HIGHER)
AUD/USD is extremely close to trading at new cycle lows below the 6670-mark from October. This is a big area around here with several powerful lows since August, thus making a break potentially important because at that point it will be trading at levels Aussie hasn’t seen since 2009. A bit of a hold and then break may make for a congestion pattern for traders to use as a set-up. Given the general trend and tone longs hold little appeal from where I sit.
GBP/USD broke important support yesterday via the 12940/3000-area. The break gave it clearance below a trend-line from November and good short-term horizontal support. After the upside fake-out into Jan 31 and downside breakdown now developing, looking for selling to come in and take Cable to around the 200-day MA.
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