On a closing basis the USD Index has seen the best performing 2-week period since Nov '13. With the US providing the main headline events this week we will quickly tell if this bullish run has been a mere fluke, or the beginning of something more substantial.
On a closing basis the USD Index has seen the best performing 2-week period since Nov '13. Bullish momentum has been increasing and it appears set to test 81.50 sooner than later. I had originally been calling for a 6.5yr cycle low to form around July-Sep '14 but I am now open to the fact we may have already seen that low back in April. 79.89 and 80 have bath housed bullish reversal candles with relatively clean bullish price action (when you compare it to the declines seen between the 81.50 high and 78.90 low) to suggest an impulsive wave is developing.
Intraday momentum is clearly bullish but drifting sideways as we await for US news to arrive. Assuming we see good housing data then I expect to hold above 81.45 but as the markets are clearly waiting for news later in the week I expect moves to be limited. Therefore I am also allowing the potential for a deeper pullback towards 80.90 (and break the bullish channel) before gains continue.
If GDP and NFP come in below expectations then we can expect the Greenback to unravel somewhat and head towards 80.70 (lower channel). However I see this as an outside chance and for price to remain above 80.70 and target 81.35 and 81.50.