Sunday, December 5, 2010

Dollar at support

The last time I had written about the dollar, sometime last week, I had pointed out that the dollar was nearing an important resistance level. Well, the pullback started pretty much the same day but I would be the first one to admit that though I saw the pullback coming, I underestimated the strength and magnitude of the pullback. Seeing the strength of the dollar at that time, I was expecting a small, orderly pullback or maybe even consolidation near the resistance level. Instead, the dollar has suffered a sharp fall and quickly finds itself at support levels. The dollar ended pretty much right at MA(20) on Friday. The last pullback, in the middle of November, saw a bounce right at MA(20), so watch out for this level tomorrow. This level also happens to be an important Fibonacci level of support as shown in the chart below. 
Take care and good luck!

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