FX Weekly (15 Jan ’16)
The anticipated corrective pullback is developing in the USD DXY Index, as momentum studies continue to weaken and the bullish Tension Indicator unwinds, with prices currently finding support just below congestion around 101.00 at the 100.80, (38.2%) Fibonacci retracement of the Nov-Jan rally.
Still deeper reactions are looked for, as short-term studies remain bearish, but critical support within 99.43/85 should underpin any tests, as background readings continue to improve and investors maintain a buy-into-weakness strategy. A break, however, would negate higher levels as investors subsequently move to a cautious stance.
Following minor setbacks, fresh USD gains are looked for, with a close above the 103.82 high of 3 January opening up historic congestion around 105.00 as the May 2016 rally extends.
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