The US Dollar Index recovered off last week's short-term double bottom but has paused at the 20-day MA over the past few days. The ensuing pullback stalled at a key fibonacci retracement (61.8% of 77.94-81.36) and EUR/USD's former head & shoulder's neckline has reverted to resistance. An early indication of possible risk aversion was Thursday's reversal in treasury prices and subsequent bearish close in equities. Moreover, Gold's inability to reclaim key resistance and weakness in the Canadian Dollar (key leading indicators) have enabled the Greenback to pressure the 20-day MA at 80.25 once again. Sustained EUR/USD weakness below 1.3978 (20-day MA) would highlight a larger head & shoulders pattern and will immediately target the 1.3800 neckline.
LOOK TO SELL EUR/USD
