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Talking Points:
- US Dollar Technical Strategy: Holding Long via Mirror Trader Basket **
- Support: 10439 (61.8% Fib exp.), 10475-84 (channel floor, 23.6% Fib ret.)
- Resistance: 10401 (76.4% Fib exp.), 10339 (100% Fib exp.)
The Dow Jones FXCM US Dollar Index began to recover as expected afterputting in a bullish Piercing Line candlestick pattern. Initial resistance lines up in the 10473-84 area, marked by the underside of a previously broken falling channel and the 23.6% Fib retracement. A break above the latter barrier targets the 38.2% Fib at 10536. Near-term support is at 10400, the April 10 low.
Our long-term fundamental view continues to call for a stronger US Dollar against its key counterparts in the months ahead. As such, we remain long the benchmark currency via theMirror Trader US Dollar currency basket.
Weekly 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