Warning: Use of undefined constant print_form - assumed 'print_form' (this will throw an Error in a future version of PHP) in /home/customer/www/fxcharts.net/public_html/wp-content/themes/iconic-one-pro-fxcharts/header.php on line 55
The DXY today made a new 13 year high at 100.57, taking out the December 2015 high at 100.51 in doing so, before correcting a little to currently sit at 100.33. The daily momentum indicators suggest that the topside is not yet finished with and that we could expect an assault on 100.80, where the triple top resistance joining the March 2015 high (100.39) and the December 2015 high (100.51) lies. This should be strong resistance at the first attempt, but beyond there we could be off to the races, with the next target being the major Fibo level at 101.83 (61.8% of 121.02 – July 2001 high/70.72 – March 2008 low), a break of which could head quickly to 103.00/25. The next Fibo level beyond that is not seen until 109.15 (76.4% of 121.02/70.72), but don’t get too excited yet! While the dailies and weeklies are both trending higher, and trading from the long side does seems to be the theme going into 2017, the daily RSIs and Stochastics are approaching overbought extremes, so some caution is warranted at these levels and dips back towards minor Fibo support at 99.46, 98.78 or even 97.67 may provide better buying opportunities, although I don’t think we see it back down at these lows for a while.
Before getting too carried away on the topside, it should be noted that the monthly chart (below) continues to correct lower, after having become overbought through 2014/15. Having said that, the MACDs appear to be about to cross higher and the only concern is the RSI, which appears to be heading for some bearish divergence, suggesting that the bulls are not going to have it all to themselves. This though is a monthly chart, and some decent dips will be healthy if the longer term uptrend is to continue, which I think it is going to heading into 2017, which is shaping up for a good year in FX. Looking for levels to buy the dip seems to be the longer term trade. With Mr Trump at the helm, it does not appear that we will have any complaints about volatility in the markets! Good luck!