The Dollar bull run still seems to be on the cards

I was caught looking for one more minor dip in the Dollar on Friday which obviously didn’t happen. Does this mean the uptrend has resumed? It certainly looks like it with the break of 1.4739 Euro and 1.1002 Swissie while the sharper losses in Cable seem to be leading the way with the clean break below 1.8445 this morning.

This does seem to point to a test of 1.8396-04 at least. Remember the larger weekly picture suggests an eventual target at 1.8328. The only issue I have with a direct test is the apparent break down in the correlation with the Euro and Swissie.

On this basis we need to watch where the Euro and Swissie can reach. The Double Top target in the Euro remains at 1.4550. These targets are rough but do tend to generate a reaction and with this area being within a larger consolidation that lasted from the end of last year into the beginning of this the odds do seem to favor this area holding. The Swissie is more clouded in its final target though I tend to favor the 1.1187-1.1208 area. On the way through to these eventual targets however, we should expect to see a correction from around the old Dollar lows.

Dollar-Yen likewise has broken directly higher this morning and we can expect a similar situation with an earlier reaction from around the 110.65 high though the eventual targets seem to be around 112.37-71.

Match this with any test of the 0.8511-26 area in the Aussie and it does mean that we’ll have to be on our guard over this week in respect to some targets being achieved before others. Quite often these occurrences cause the market to become a little more erratic. However, for now remember that the main directions till remains Dollar bullish.


Have a profitable week.