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Talking Points:
- US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
- Support: 10538 (trend line from Sep’12), 10520 (Feb 17 low)
- Resistance: 10576 (23.6% Fib ret.), 10610 (38.2% Fib ret.)
The Dow Jones FXCM US Dollar Index began to cautiously drift higher after putting a Hammer candlestick above support at a rising trend line set from September 2012. Initial resistance lines up at 10576, the 23.6% Fibonacci retracement, with a break above that on a daily closing basis exposing the 38.2% level at 10610. Trend lien support is now at 10538, followed by the February 17 low at 10520.
Yesterday’s price action produced the strongest positive close thus far this month, hinting shift in the fundamental backdrop we discussed at the onset of the trading week may be starting to materialize. We remain long the US Dollar via the Mirror Trader US Dollar currency basket. **
Daily Chart – Created Using FXCM Marketscope 2.0
** The Dow Jones FXCM US Dollar Index and the Mirror Trader USD basket are not the same product.
— Written by Ilya Spivak, Currency Strategist for DailyFX.com