The US dollar has rallied significantly during the trading session on Tuesday, reaching towards the significant 1.2750 level above. That’s an area that is important, as it has offered resistance in the past. If we can continue to go above there, the market should then go looking towards the psychologically important 1.29 level, an area that has been resistance in the past, and I believe that it extends to the 1.30 level above there. In other words, it is a significant “barrier” to a higher pricing. I think that we will probably have to build up enough momentum to finally clear that area. Once we do, the pair will become more of a “buy-and-hold” scenario.
When I look at this chart, I think that there is significant support near the 1.2675 level underneath, which should continue to offer opportunities to pick up the US dollar “on the cheap.” Remember, the crude oil markets will have their influence on this pair, and the of course look susceptible to selling pressure going forward. I think that if we were to break down below the 1.2675 level, then I think the market will probably go down to the 1.2625 level.
I believe that by the time we reach summer in the northern hemisphere, we will be above the 1.30 level, and continue to reach towards the 1.35 handle later in the year. I believe the crude oil markets are going to continue to suffer at the hands of extended American drilling.
Written by FX Empire