The Dollar Index (DXM11) lost more than a percentage during last week; yesterday it traded flat and mild short covering was witnessed after the Dollar Index neared critical support of 73.40 ranges. DXM11 may trade sideways with 73.40 acting as very important support; only weekly close below 73.40 would result in further weakness reinitiating long-term bearishness in the USD.
Key equity index, Dow Jones Industrials (DJIA) has broken important trend line support at 12200 ranges to currently trade at 12110 ranges; 11600-11700 ranges is expected to act as final support for DJIA. Historic correlation between DJIA Vs DX suggests sideways trend in the Dollar Index with probable short covering in near the near term.
NYMEX Crude July basis is trading in sideways trend between $102.70 and $96.00. $95.00 is expected to act as decent support, only breach of $95.00 would result if further weakness.
FX Pair Support 2 Support 1 Resistance 1 Resistance 2
EURUSD 1.4440 1.4525 1.4640 1.4750
USDJPY 79.50 80.00 80.60 81.20
GBPUSD 1.6250 1.6300 1.6440 1.6540
USDCHF – 0.8250 0.8400 0.8450
EURJPY 115.60 116.00 117.65 118.00
AUDUSD 1.0640 1.0690 1.0770 1.0840
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