US Dollar at Key Support

21 thg 5

The USD decline settled into key support last week at 104.15/36- a region defined by the December high-close (HC), the 38.2% Fibonacci retracement of the December rally, the measured head-and-shoulders objective of the April breakdown, and the 200-day moving average. Note uptrend slope support also converges on this threshold over the next few weeks and the immediate focus is possible price inflection off this zone with the bears vulnerable while above.

Topside resistance is eyed at the 105-handle and is backed 105.58/63 – a region defined by the 61.8% retracement of the recent decline, the January 2023 high, and the March high-day close (HDC). A breach / close above this threshold would be needed to suggest a more significant low was registered last week and shift the focus back towards the yearly HDC at 106.37.
A break / close below this key support zone would suggest a larger trend reversal is underway with such a scenario exposing the 2023 yearly open at 103.49. Key longer-term support remains unchanged at 102.75/99.

Bottom line: The US Dollar is responding to confluent uptrend support with the weekly opening-range taking shape just above- looking for evidence of an exhaustion low here. From at trading standpoint, a good region to reduce short-exposure / lower protective stops – losses should be limited to 104.15 IF the broader uptrend is to remain viable. Ultimately, a close above 105.63 would be needed to mark resumption of the broader uptrend.

Michael Boutros
MBForex

29 thg 5

Ghi chú

Key support now defended for a second time - Focus is on a breach / close above the 25% parallel here to suggest a more significant low is in place.

US Core PCE on tap into the close of the week- stay nimble into the monthly cross here and watch the weekly close.