8-10-08
20:45 GMT – The US dollar made a strong rally last week with the GBP/USD pair falling almost 600 pips in the last 7 days! Several pairs including EUR/USD, USD/CHF and the GBP/USD are at key support and resistance levels leading me to believe that the rise of the US dollar will stall at the least and possibly slighly reversal as overbought/oversold levels are consolidated.
Because of the 600 pip drop I needed to consult the weekly charts (seen below) to find the key support levels as all daily and hourly chart supports were broken. In the long term I expect more USD strength as the economic slowdown catches up to the rest of the world but we will most likely see some overbought USD sales to consolidate the gains.
Trading Idea: Look to sell rallies, possibly in the 1.9450 or 1.9550 resistance areas. Ultimately I see the pair challenging 1.8900 in the coming weeks.
(click to enlarge)
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