Dollar Index Technical Update – WC 6th May 2013 – USDX Analysis
- Our recent technical updates have referenced the USDX 81.45 previous resistance area as a key technical point of interest for the US dollar index.
- Price has subsequently found support at this area and seen a move back to the 61.8% Fibonacci retracement of the last swing lower around 82.60 (see D1 chart below).
- The 81.50 area is now viewed as a potential price pivot zone going forward and marks the recent range lows.
- 83.42 marks the range resistance high point; a sustained move above this area, or below 81.45, is now needed to gain a mid-term directional bias and break from the consolidation range.
- Near term potential resistance remains around the 61.8% Fibonacci area and Fridays high at 82.60.
- The key EURUSD pair (EUR has a 57.6% USDX weight) is caught in a near 200 pip range between 1.3033 and 1.3241. A sustained range breakout would likewise provide a directional bias for the USDX.
- We also note that the latest COT report update has the EUR net short position at -30K versus the previous -35K reading and the JPY net short position at -71K versus the -80K prior reading. This shows that large speculators had cut their net euro and yen short positions. Long dollar positioning was relatively steady at $24.49 billion versus $24.94 billion for the prior week.