At 95, Dollar index is at very significant juncture technically. A clean break here can open the path for 92 and 90. If DXY stabilizes here then a messy low range of 94 – 96 might continue for longer. Further ramp up of rate hike expectations from Fed, like what Dudley did yesterday without action in the next meeting may provide coup de grace for the dollar.
There are many things going on in the market and it is lacking the consistent theme to make it difficult to hold the trade for long. Things which are highflyer today, plummet hard the next day. Wise thing to do is to figure out the support / resistance levels every day and trade each day accordingly.
Even thought things are muddy and turns around quickly, good thing is that the trades in major pairs are very obvious if you have patience to wait for the levels. Now all majors are kind of buy the dip trade – EUR/USD, GBP/USD, AUD/USD and NZD/USD. Besides that JPY pairs will be heavy in coming sessions because there is high probability of USD/JPY going to 95 sooner rather than later.
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