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FX Talking Points: U.S. FX Preview |
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By Dave Floyd
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March 31, 2010
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Good morning folks. The losses in EUR/USD were partially taken back overnight as support at the 1.3400-15 area managed to attract some buyers. As noted yesterday, I am inclined to sell into this rally and currently am looking at the 1.3500 area with stops above 1.3537
However, as you can see in the chart below of the Dollar Index (DXC) the pull-back overnight is of concern.
DXC 60-min chart
 Click on image to enlarge!
While Wave 2's can retrace up to .786% of the distance of Wave 1, the typical pull-back is usually in the .50 to .618% area. A break below 81.00 and we will need to conclude that the Wave 2 (green shading) correction is still unfolding.
Meanwhile as noted a few times yesterday as well as in the 24-Hour Targets & Levels, USD/JPY has traded into the proposed resistance/target range - prices are likely to consolidate or pull-back slightly from here before another leg higher. Prices need to stay above 92.78 in order for the bullish outlook to remain intact.
 Click on image to enlarge!
For more from Dave, visit Aspen Trading for more updates. |
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