TechnoMeter

The US Dollar is seeing its sharpest pullback after touching technical resistance mid-month at 97. The Dollar Index has pulled back by 2.4% despite hawkish talk from Fed members. The key question on the charts will be as to whether the next move higher in US Dollar will result in a lower-high that is followed by the next big breakdown.



As a technically-driven FX trader, the most important development for me to watch is what happens on the immediate pull-back. If we see a weak, three-waved pull-back higher that is limited to 95.30 before resuming lower, then we could see multiple weeks or more of US Dollar weakness that could lead to opportunities in beat-up currencies like the Australian Dollar despite improving fundamentals.

more...