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Mixed Currency Market Signals

News wires have gone quiet in regard to ‘strong-dollar’ US Administration jawboning, and the inability to back the talk with action. TheLFB client notes have called for consolidation at support above 72.50 on the dollar index (DXY), and to monitor resistance at 76.50 very closely. The major currencies are trading in mixed fashion against the US dollar with the British pound and Australian and Canadian dollars gaining, while the euro, Japanese yen, and Swiss franc are moving sideways.

Tradable calls to action were sent to clients last week with signals to sell DXY, which have now completed their course and should be closed. Six days of sideways consolidation allowed only one break-out signal to form.

No signals are forming in the near-term, after last week’s burst of dollar buying energy continues to be absorbed. Clients will be notified when price action breaks and holds.

Sentiment towards the Usd remains mixed. Price action favors consolidation of recent moves across all major currencies. Caution is required by traders who are looking for sustainable price action on either side of the US dollar as TheLFB trade desk is not expecting a sustainable break-out higher in DXY values above 76.50, or lower below 72.50 in the mid-term.
Price Action:
There was strong buying activity previously at 74.50 on DXY, which is a potential price reversal area of note. This swing point area, where a near-term trend forms and price action reverses previous trade direction, will be closely monitored and market alerts sent to subscribers as things unfold.

The daily trading range on DXY is 60 ticks, which is above the historical norm and indicates high speculative interest. The 50-day Simple Moving Average (NYSE:SMA) on S&P 500 is @ 75.50, with the 20-day SMA at 74.30. DXY price action has a 36-month 75% correlation to crude oil and SPY moves, and an 80% correlation to the euro (Eur/Usd) currency moves.

The detail below will help guide traders with analysis on intra-day price movement, trend, and momentum. Clients will note how regularly the Swing Point and Support or Resistance areas below are used each day.

Content taken from TheLFB Trade Plans

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