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Talking Points:
- US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
- Support: 10540 (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 rebound after showing a Hammer candlestick above support at a rising trend line set from September 2012, with prices on pace to produce the strongest upside run in a month. Breaking above the 23.6% Fibonacci retracement at 10576 on a daily closing basis exposes the 38.2% level at 10610. Trend line support is now at 10540, followed by the February 17 low at 10520.
The greenback’s performance thus hints the shift in the fundamental backdrop we discussed at the onset of the trading week may be materializing, with today’s US CPI data expected to offer further support. 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