Monday, January 24, 2011
Daily DXY Roundup - 1/24
The US Dollar ended the day modestly lower after finding short-term support from a key Fibonacci retracement at 77.852. The DXY, however, is trending lower within a short-term bearish channel pattern and will need to close above the broken 50% retracement level at 78.538 to avoid weakening further. In the meantime, a clean downside break of the 61.8% retracement support will expose the long-term trendline support and double top target in the mid-76 range.
The euro pared early gains, finishing up slightly higher on the day against a trade-weighted basket of currencies. There are tentative signs that the single currency may be at least due to consolidate here. The Euro Index and EUR/JPY both marked daily doji patterns, meriting a possible correction given overbought daily conditions. The EUR/AUD and EUR/CHF each triggered daily bearish engulfment patterns. And, the EUR/USD is once again trading within a rising wedge, which requires a loss of formation support in the 1.3580 region to confirm a meaningful reversal.