The US dollar briefly tested 14-month lows Thursday before slowly recovery some of the ground lost throgh the session. The mark has been made and the intentions behind the steadfast bearish trend are clear. We have come ot a technical crossroads and a break will have to come sooner or later. Taking a look at the trade-weighted dollar index, we can see much of the same chart as in EURUSD, AUDUSD or NZDUSD - an anti-dollar trend channel that has come to some measure of resistance. For the commodity bloc pairs, no natural boundary exists because risk appetite has already ensured they are already ahead of the crowd. However, there is a glaring milestone of 1.4840 found in EURUSD. A pull back for the dollar would not be difficult to manage. There is breathing room in the channel. However, this gap is clearly closing; and a break from this terminal pattern could very well reestablish trend - bullish or bearish.
Al Bawaba
