2 Sep 2013
DXY working its way through a correction after 5 waves up Wednesday through Friday
FXstreet.com (Barcelona) - The DXY exploded higher after setting new short-term lows last Wednesday and completed a five wave up move by late Friday. Now it seems to be in the midst of wave “b” of an “abc” correction to the downside.
DXY reacted to a positive data and hopes that Syria problems would ease
Stronger-than-expected US data flow last week – combined with some surprisingly weak data out of Germany – spurred a sudden reversal higher in the DXY starting Wednesday. The good US data continued Thursday and into Friday right along with rising hopes that the US might take a less hawkish stance towards Syria – giving the DXY even more of a boost. By Friday afternoon in the US, upside targets for this first 5-wave sequence had been met and wave “a” of a corrective move lower started and continued into Friday’s close.
We saw a modest bounce early Monday (wave “b”) which appears to have topped out and now the DXY is in the early stages of wave “c” to the downside. This downside move will, according to technicians, find support at the 81.94 – 82.01 range sometime on Monday.
Technical outlook for the DXY
As noted above, short-term support for DXY comes in at 81.94 – 82.01. Any move below that opens up the possibility of a test of Wednesday’s lows at 81.11. Major resistance for DXY comes in at 82.50. Any break and close above that level will likely have any DXY bears throwing in the towel. Meanwhile, if the DXY closes below 80.50, the bulls will be forced to re-evaluate their theses.
DXY reacted to a positive data and hopes that Syria problems would ease
Stronger-than-expected US data flow last week – combined with some surprisingly weak data out of Germany – spurred a sudden reversal higher in the DXY starting Wednesday. The good US data continued Thursday and into Friday right along with rising hopes that the US might take a less hawkish stance towards Syria – giving the DXY even more of a boost. By Friday afternoon in the US, upside targets for this first 5-wave sequence had been met and wave “a” of a corrective move lower started and continued into Friday’s close.
We saw a modest bounce early Monday (wave “b”) which appears to have topped out and now the DXY is in the early stages of wave “c” to the downside. This downside move will, according to technicians, find support at the 81.94 – 82.01 range sometime on Monday.
Technical outlook for the DXY
As noted above, short-term support for DXY comes in at 81.94 – 82.01. Any move below that opens up the possibility of a test of Wednesday’s lows at 81.11. Major resistance for DXY comes in at 82.50. Any break and close above that level will likely have any DXY bears throwing in the towel. Meanwhile, if the DXY closes below 80.50, the bulls will be forced to re-evaluate their theses.