By FXEmpire.com
The US dollar had a back-and-forth session on Monday, as denoted buying the Dixie. This contract is currently sitting just above the 82.50 handle, and as such is sitting on top of an uptrend line. We have been trading in the channel for some time, essentially the entire summer, and we think that eventually we will break out of this channel. Of course, the real question is in one direction.
We think that there is quite a bit of support below, and wouldn’t really be interested in selling this market unless we got below the 81.50 level. You have to remember that the Euro is 40% of the contract, and as such it’s difficult to see this contract melting down. However, we never really know what’s going to happen so anything’s possible. On a break above 83, we are willing to go along. On a break below 81.50, we are more than willing to short this contract. Until then, we think there is a lot of noise in this chart and will be sitting on the sidelines.
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Originally posted here
