U.S. Dollar Index
Last week the ECB decided to leave interest rates unchanged, yet Mario Draghi did allude to the potential of easing the Euro’s monetary policy in the near futures. This sent the Euro currency into a tailspin and, as a result, the U.S. Dollar Index rallied hard off contract lows. Coming into this week, a retest of previous resistance appears to be in the cards for the USD.
The resistance area that I am referring to is from 80.055 - 80.130, which marks the area constructed from multiple Fibonacci retracement levels as well as technical S/R pivots. This area of resistance could provide valid trading opportunities on both sides of the market. Near term momentum appears to have taken a turn higher, which could justify buying a breakout above the previously mentioned resistance area; however, given the longer term bearish action in price, the “knee jerk” rally that occurred late last week could provide bears with a more favorable entry level to short this market on a retest of resistance.
U.S. Dollar 30-minute Bar Chart (e-Signal)