Hey Traders,
some incredible currency moves last Friday. Dollar has clearly has been in steep downtrend helping fuel the recent rally.
After breaking down below two yearly lows for the dollar, it managed to close back above that support, with incredible bearish sentiment on the dollar with only ~3% dollar bulls earlier this week, the short dollar trade certainly seems to be overcrowded.
Will be watching this daily downtrend channel for clues:
For dollar bulls to get something going they will need to make higher highs, with recent high laminated with 50ema, above there the top of the channel is expected to act as resitsance.
Euro has also made a huge move on Friday , closing back below the major trendline that euro has been bumping up against for few weeks:
Highlighted areas are expected s/r levels. On the downside will be watching recent low , laminated with 50ema, with two channels/trendline meeting right below. If those are broken MAJOR s/r level at 1.375 is expected to act as support. Upside is currently the path of least resistance, considering broken retracement and resitance lines. THe recent highs are expected to act as resistance. Other than very overcrowded trade and not many left to buy / get squeezed, tehre is really not much in the way of euro to the long side TA wise.
As always will post twitter updates about key technical euro levels on the blog and via Twitter @esecfutures
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Cheers
Vlad