US Dollar sets another eight-month low


Prices appear to have narrowly edged above resistance at $1,181.42, the 123.6% Fibonacci extension of the 8/5-8/25 downswing. Negative RSI divergence hints at fading momentum behind the advance, but a move toward the 138.2% Fib at $1195.28 now looks likely in the near term. $1181.42 has been recast as support.


The greenback has set another 8-month low amid lingering rumors of renewed quantitative easing by the Federal Reserve. Near-term support lines up at 78.45, while resistance stands at 79.51. That said, relative strength studies point to deeply oversold conditions, hinting a bounce may be around the corner.


Prices continue to stall after breaking above horizontal resistance at $75.59 – a level now re-cast as support – having found support at a minor rising trend line established from Augusts’ swing low. Positioning continues to favor gains, with the bulls aiming to challenge $78.04. Alternatively, a move back below $75.59 would relieve upward pressure, exposing the trend line (now at $73.74) once again.


The bulls have returned in force, with prices cracking through resistance at the $1300.00 figure and overcoming the 138.2% Fibonacci extension of the 6/21-7/28 downswing ($1306.66). From here, the door looks open for an advance to the 150% Fib at $1319.44.

About the Author
Ilya Spivak

Ilya Spivak is San Franciisco-based currency strategist for DailyFX.

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