The dollar may have made a comeback a mere 24 hours after the FOMC meeting: It fell to a low of just over 1.09 versus the euro last Wednesday before clawing back some losses to close at 1.0660 on Thursday. However, we think that the dollar could become increasingly at risk from sell-offs in the coming weeks, and bulls need to get used to the dollar no longer moving higher in a more-or-less straight-line fashion.
This is the first sell signal on the British pound since the trend turned back to down last Friday. British had a nice corrective retracement for the past month before regaining its overall down trend. Notice when the 2 moving average crossed British had a big down day.
It’s been an interesting start to what promises to be a interesting week in the forex market. The biggest story of Monday’s trade thus far has been the continued strength of the dollar despite disappointing data in the world’s largest economy.