Risk of a corrective pullback before DXY regains higher levels
Sentiment in the USD remains bullish, with the May rally now trading above the 101.80, (61.8%) retracement of the 2001-2008 fall and testing the 103.20 year high of January 2003. Further immediate gains, however, are expected to prove progressively difficult to maintain, as overbought stochastics begin to unwind and the RSI flattens.
A corrective pullback is highlighted towards the 100.51 year high of December 2015, but any close beneath here should stabilise above the May 2016 trendline, as the Tension Indicator (not shown) continues to improve and background studies turn higher. A break, however, would turn investors cautious once again, as congestion around 95.00 then attracts.
Following any minor setbacks, further gains are looked for, as the May rally gains traction and investors maintain a buy-into-weakness strategy, with a close above 103.20 targeting historic congestion around 105.00. Still higher is the 107.30~ high of December 2002.
A corrective pullback is highlighted towards the 100.51 year high of December 2015, but any close beneath here should stabilise above the May 2016 trendline, as the Tension Indicator (not shown) continues to improve and background studies turn higher. A break, however, would turn investors cautious once again, as congestion around 95.00 then attracts.
Following any minor setbacks, further gains are looked for, as the May rally gains traction and investors maintain a buy-into-weakness strategy, with a close above 103.20 targeting historic congestion around 105.00. Still higher is the 107.30~ high of December 2002.
