As I wrote about two days ago in my daily commentary, the US$ index was showing signs of being in a corrective pullback phase, and one should not expect USD strength to continue. On the next day, the EU, GU, AU and NU all closed higher and continued padding on further gains today. As discussed in the post, the best play was to look for a short off the dynamic resistance and daily 20ema parked at the 80.00 figure. Playing out as expected, it went only 1.3pts above 80, rejected off the 20ema, following it up today giving you a 2nd opportunity to sell off the 20ema.
Today's selling was by far the aggressive in this pullback and the 1st day in nine that price action closed under the lows of the prior day. This could lead to a new wave of USD strength to end the week. At best, I suspect one more attack on the upside is possible, so will be happy to short at the aforementioned levels again, looking for a medium term target of 78.75.
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