23 Dec 2013
DXY fails to eclipse short-term hurdle – DESPITE THE FED’S TAPERING ANNOUNCEMENT!
FXstreet.com (Barcelona) - The DXY failed to put the nails in the coffin of the bears late last week by failing to trade and close above the maximum possible “correction resistance” level at 80.72.
Traders to tread lightly this week, but have US data flow to digest later in the session
The DXY failed to do what the bulls expected it to do last week when the 80.72 Fibonacci price projection resistance was left un-violated. Traders and analysts alike are wondering what the cause of this sluggish DXY behavior could be. The less-than-impressive magnitude of the tapering itself, the Fed’s accompanying dovish comments, the shadowy forces behind the scenes (i.e. China) telling the Fed they’d better keep a lid on rates, deeper problems with the US economy that they are not sharing with us, and trepidation about the implementation and unintended consequences of Obamacare in the US are all potential reasons making the rounds.
DXY watchers will be monitoring US data points due out starting at 13:30 GMT:
• Chicago Fed National Activity Index
• Personal Consumption and Spending data
• Reuters / University of Michigan Consumer Sentiment
Technical outlook for the DXY
Technicians say the DXY may have set a short-term low at 79.75 support last Thursday. Below that level, there is additional support at 79.63 and at the ultimate “line in the sand” at 79. Resistance for DXY comes in at ST “correction resistance” at 80.72 and is followed up by a round number level at 81 and is backed up further by the horizontal line at 81.50. The ultimate target for DXY for this move higher should – according to DXY bulls – be 86.92 in the long-term (so get ready, if 80.72 is broken, for whatever ramifications that may bring to the other asset classes).
Traders to tread lightly this week, but have US data flow to digest later in the session
The DXY failed to do what the bulls expected it to do last week when the 80.72 Fibonacci price projection resistance was left un-violated. Traders and analysts alike are wondering what the cause of this sluggish DXY behavior could be. The less-than-impressive magnitude of the tapering itself, the Fed’s accompanying dovish comments, the shadowy forces behind the scenes (i.e. China) telling the Fed they’d better keep a lid on rates, deeper problems with the US economy that they are not sharing with us, and trepidation about the implementation and unintended consequences of Obamacare in the US are all potential reasons making the rounds.
DXY watchers will be monitoring US data points due out starting at 13:30 GMT:
• Chicago Fed National Activity Index
• Personal Consumption and Spending data
• Reuters / University of Michigan Consumer Sentiment
Technical outlook for the DXY
Technicians say the DXY may have set a short-term low at 79.75 support last Thursday. Below that level, there is additional support at 79.63 and at the ultimate “line in the sand” at 79. Resistance for DXY comes in at ST “correction resistance” at 80.72 and is followed up by a round number level at 81 and is backed up further by the horizontal line at 81.50. The ultimate target for DXY for this move higher should – according to DXY bulls – be 86.92 in the long-term (so get ready, if 80.72 is broken, for whatever ramifications that may bring to the other asset classes).