Last week dollar made a few more scares to the bulls, but eventually won the fight and broke above 90, where it stayed after strong bottoming on a 5M chart before the market close. The interresting part is how it got there. The USD upmove started on thursday already, with Asia not being able to break the previous low, London was buying dollar most of its session and NY was just ranging, not being able to break it back down. And friday, being many times the most important day of the week, when it comes to future outlooks, just continued this path. We had important US news on friday, the numbers are rarely important, what the “big boys” do with them is important. First NY hour, we had a fake bear candle, quickly reversed the next hour. And London fix confirmed a strong bottom around 89.80. Next hour, we had an important speech from FED’s Clarida, who was basically talking the dollar down with negative outlooks. BUT the London fix support did not break, anyway. That was a sign, that whatever negative news might come, there is not much interrest from “big boys” to sell the dollar anymore, in other words, its undervalued. From that support, we went up above 90.20 and even though the last few hours before market close we had a correction back towards 90, it wasn’t able to break below anymore and ended up with a strong bottoming on the 5M chart. This might be a clue into next week…if there is no opening gap down, the 90 handle might be re-visited a few times, before the dollar heads above it towards 91 and higher. On the EU chart, this reflects to the 2100-2140 area, which is a very strong support zone. If this zone gives up and bears are able to close below 2100, it might go down below 2000, towards my first big target of 1920-50. Another positive thing for EU bears is the fact, that retail seems to be 100% convinced about 1.25 and I am seing a lot of people only looking for longs into a new high. I don’t see it…not from here, anyway.
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