The Dollar is currently bumping along at 98.33 after a pretty sharp slapdown from the 98.80- 99.00 resistance area. This area is where the downward trendline used to be, and now its the level that’s been keeping the Dollar from making any real progress. This indicates that even with all the bearish signals we’re seeing, the Dollar is still in a bearish gear.
If the Dollar can’t get back up to 98.80, the first place it’s going to be heading is 97.97 and then 97.60. And if it does break down through 98.20 then you can pretty much expect a fast bearish move. But only a sustained move above 99.00 would start to make me think that the Dollar is actually coming back to life and I would start looking at 100.10 as a possible target.
Trade idea: If you think the Dollar is going to break down then you should be looking to sell below 98.20, targeting 97.60, and you should have a stop loss in place just above 99.00.
