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28 Aug 2013
The DXY posts bearish engulfing candle Tuesday – confirming more downside ahead
FXstreet.com (Barcelona) - The DXY broke out of the three-day period of indecision to the downside by posting the dreaded bearish engulfing candle which, at the very least, sets the direction for the short-term.
DXY blew off better economic data from the US to finish near the lows
The S&P Case Schiller Home Prices Index, Consumer Confidence and Richmond Fed Manufacturing data all came out better-than-expected during the US session. But, the normally DXY-bullish data was brushed aside in favor of the new-style risk-off trade where big money flows into US Treasuries, gold, silver and the Japanese Yen and out of most everything else.
Wednesday, traders will be eyeing German consumer confidence data and import prices; the Swiss Consumption Indicator; EuroZone money supply; and, the Bank of England’s Mark Carney speaking before Parliament. Later in the day in the US, pending home sales data will be released. All of this data has the potential to move the DXY modestly. However, the likelihood is that the only big moves in the greenback will be Syria and/or tapering-related.
Technical outlook for the DXY
Technicians are still calling for a little more downside in the DXY before the projected target of 80.51 will have been effectively tested. Once that level is tested, they say a fairly substantial up move to 85 – 88 is expected. Only a close above 82.50 will have the bears exiting their downside bets. Meanwhile, if the DXY closes below 80.50, the bulls will be forced to re-evaluate their theses.
DXY blew off better economic data from the US to finish near the lows
The S&P Case Schiller Home Prices Index, Consumer Confidence and Richmond Fed Manufacturing data all came out better-than-expected during the US session. But, the normally DXY-bullish data was brushed aside in favor of the new-style risk-off trade where big money flows into US Treasuries, gold, silver and the Japanese Yen and out of most everything else.
Wednesday, traders will be eyeing German consumer confidence data and import prices; the Swiss Consumption Indicator; EuroZone money supply; and, the Bank of England’s Mark Carney speaking before Parliament. Later in the day in the US, pending home sales data will be released. All of this data has the potential to move the DXY modestly. However, the likelihood is that the only big moves in the greenback will be Syria and/or tapering-related.
Technical outlook for the DXY
Technicians are still calling for a little more downside in the DXY before the projected target of 80.51 will have been effectively tested. Once that level is tested, they say a fairly substantial up move to 85 – 88 is expected. Only a close above 82.50 will have the bears exiting their downside bets. Meanwhile, if the DXY closes below 80.50, the bulls will be forced to re-evaluate their theses.