Nearer-Term US Dollar Index Uutlook
On Jun 21, I affirmed the bigger picture view of a bottoming (and potentially major bottoming, see longer term below) from that May 3 spike low at 91.90. The market has indeed rallied since, breaking above the May 30 high at 95.95 and currently chopping near recent highs at 96.70/85 (also the ceiling of the bullish channel from that May 3 low). I'm still a bigger picture bull with the recent break above the ceiling of the bearish channel from Dec. adding to that view. On a short term basis, however, there is scope for another few days/week of correcting before resuming the larger upmove (see in red on daily chart below). Nearby support is seen at 95.65/80 and the broken ceiling of the bearish channel from Dec (currently at 94.90/05). Resistance remains at the recent highs/ceiling of the bull channel from the May 3rd low (currently at 96.70/85) and 97.25/40 (62% retracement from the Dec high at 100.50). Bottom line : still a big picture bull but risk for a another few days/week of consolidating before resuming the larger upmove.
Strategy/Position:
With the view of a more important bottom still in place, looking to trade from the long side but with scope for nearby ranging (and lower levels), would not just buy here. So instead for now, would buy 94.95 and then initially stopping on a close 20 ticks back below the broken ceiling of the channel from Dec. Would also buy on a close 20 ticks above the ceiling of the bullish channel from the May low (don't want to miss the next upleg if the but target is not reached) and in that case initially stopping on a close 20 ticks back below.
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