By Mike Ber
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US Dollar Features – Daily Chart
Our bias for US dollar remains unchanged – Bullish-Neutral, and that means that even though we are expecting the current up move to continue, if there is a pullback we want to enter a position or add to a long position on that pullback.
Excerpt from our update on March 16th: “Dollar had a nice run, and there is no reason to believe that this run will stop. We think a retreat to a 81.565-81.23 area is very likely, and will represent a very good buying opportunity. Eventually we are looking for the dollar to rally back up to the previous high – 83.42, and at that time we will be watching for a dollar to continue higher or form a double top and break down.”
Excerpt from our update on March 19th: “…the rally might not be sustainable at this point. Indeed, the recent session shows some signs of weakness. It remains to be seen if we formed a double top here or not. Dollar couldn’t make a new high today, even though it had a strong catalyst to do so – the unresolved situation in Cyprus with regards to bailout. Cyprus lawmakers overwhelmingly rejected the terms of the bailout proposed by the Euro Zone, with non of the politicians voting in favor of the solution.”
While in the long term Dollar’s prospects are bullish, we expect a pullback before continuing higher.
The dollar tested the resent highs last week, but it reversed at 83.31 and retreated closing at 82.52 for a week. The reversal from recent highs strengthens our case for expectation of a temporary pullback. Near-term resistance is at 81.885, but retreat to the 81.49 (November 2012 high) area is very likely. We think 81.42 area will represent a good buying opportunity.
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