Dollar Rising On Weekly Basis But Corrective Price Action Could Potentially Continue.
Analysis from Forex FX 4X
- A corrective move on the USDX came after price had pierced the key price pivot level around 79.70; this had confluence with a 38.2% Fibonacci retrace of the prior swing lower.
- A further move lower could potentially now be seen as the long upside shadow on Thursdays candle (resembling a bearish pinbar), coming at a confluent technical area, has the look of a swing area. This is no doubt heavily dependent on developments in the euro-zone area which should have a bearing on any near term dollar movement.
- The USDX gave a modest weekly range of 151 pips which is 94% of the 160 pip 26 week average weekly range.
- The latest February COT report data (14th Feb reporting period) shows the key EUR FX (CME) experienced a moderately bearish change insentiment. The bullish EURUSD price action was not reflected in this data though and a continuation of the EURUSD upside price action would add bearish pressue to the USDX.
- Potential resistance is seen at the 79.70 price pivot with the 80.00 psychological round number and 50% retrace of the last swing lower closely aligned on a failure to hold below 79.70.
- The 78.35 swing low on 9/2/2012 was held by the highly confluent area comprising of 38.2 and 50% retraces of prior moves. This now has price structure support and we will monitor closely on any further move to this point for potential support.
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