Richard Perry
Independent Analyst
Interestingly from the perspective of dollar strength seen over the past few days, yesterday’s price action would have been viewed as a disappointment. An inside day (not entirely surprising given the magnitude of the previous session), but also another close around 102.80. I have said previously about the importance given to the pivot level of 102.80 in the past few months and again it has proved to be the case. Asian trading today has been positive for the dollar again so it will be interesting to see what the reaction is today and whether there is a repeat of yesterday’s waning of dollar strength as the day goes on. The RSI is up at over 70 still (suggesting a stretched move) and also the entire of yesterday’s session was outside the 2.0 Bollinger Bands (which again implies a stretched move). I believe therefore that immediate upside potential is limited and the prospect of a correction if not a consolidation is quite high. The first real support is not until 102.30. A breach and close above 103.08 would re-open the upside.
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