Missed the Move? Be Prepared for Turn Around Tuesday

There has obviously been a boat load of US dollars bought over the last four sessions. There are some preliminary technical signs that the near-term momentum may have exhausted itself and short-term participants are better advised sell into a bounce rather than rush into it now.

Heavy selling failed to send the euro though the $1.3050 level and a bounce now could carry it up into the $1.3150-60 area. Sterling failed to make a new low in the North American morning and a bounce could see $1.5460-80.

The Australian dollar is perhaps the most interesting. It is recording an outside day, having traded on both sides of Friday's range. The new lows recorded earlier today corresponds to a 38.2% retracement of up trend off the 2008 lows. To solidify the expectation for a near-term bounce, it would be best, from a technical perspective for the Aussie to close the North American session today above Friday's high of roughly $0.9260. A short-term recovery can see $0.9350-$0.9400.

The yen does not fit as nicely into this picture. Today's dollar high near JPY98.70 could be important technically as it is a 50% retracement of the dollar's decline from May 22's multi-year high. Initial support now seen near JPY96.80. 

To be clear, this is not a strategic call, but a tactical warning.  Over anything but the shortest of terms, the dollar, we think is still headed higher. 

Missed the Move? Be Prepared for Turn Around Tuesday Missed the Move?    Be Prepared for Turn Around Tuesday Reviewed by Marc Chandler on June 24, 2013 Rating: 5
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