Richard Perry
Independent Analyst
A hawkish leaning in the Fed meeting minutes have added to dollar strength in the past few days and this is being seen on Euro/Dollar. Having breached the key near term support at $1.3330 a couple of days ago the euro is now really struggling again. The key November low at $1.3295 has been quickly blown away and there is now little reason not to believe the euro will not retest the September low at $1.3100. Momentum indicators are quickly turning negative once again as the bullish divergences which had been a feature of the consolidation are now being aborted. The only crumb of comfort for the bulls is that the RSI is again stretched to the downside. However the strength of the selling pressure does not suggest that it is going to be momentum that stops this sell-off. The intraday chart shows very minor resistance at $1.3273 and around $1.3300, with $1.3330 being the main near term resistance now. There may be a consolidation as we approach Janet Yellen’s Jackson Hole speech, but for now the strength is with the sellers.
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