Tech Musings:- Currencies

After sliding into sideways corrective mood, DXY is again looking poised for an up move.  From the current levels of 80.75 DXY can hit 85 levels. Any further up move will depend on DXY breaking 85 – 86 levels. I have been bullish on DXY since 2011 and updated my view recently on JAN 2014

I was expecting a sustained down turn in Euro since Jan 2014. In my previous post I wrote, “Euro faces stiff resistance at 1.38 levels. It seems that euro is now all set to start its downward journey.   Traders can sell Euro with a stop of 1.40 and target of 1.30 and below”

If we look at the given chart of euro, it made a high of 1.3993 and have corrected to 1.3548 since then. The downward momentum in Euro should continue and we may see levels of 1.30 and below.

Similarly I have been bearish on GBP since 2013. On 11th April 2014  I wrote, “Sell GBP with a stop loss of 1.6900” Since then GBP made a high of 1.6996 and have now crashed at 1.6764 levels. My sell call on GBP has not pared well.

If we look at the given chart of GBP I see two possibilities.

1.      GBP breaks above 1.70 and move up to 2

2.      GBP breaks down to 1.60 and below.

Although, GBP looks less bearish compared to EURO, but DXY is looking poised for a very strong up move. Looking at DXY I will favor the second scenario and will bet on the downside for GBP.

Readers may sell GBP at CMP with a stop of 1.7050 on weekly closing basis.

Summary:

1.      DXY will move up to 85 – 86 levels

2.      Euro looks weak and may fall to 1.30 levels.

3.      Sell GBP at CMP with a stop of 1.7050 and target of 1.60 and below