As risk aversion rears it's ugly head, the US Dollar Index continues to benefit. Although, foreign exchange markets remain mired within relatively tight ranges, energy markets have pulled back quite significantly. The reversal in risk appetite has enabled several equity indices to probe below their head & shoulder necklines, reaffirming a medium-term top in the stock market. Meanwhile, the EUR/USD reversed course at former trendline support, highlighting a bearish rejection and a possible shift in sentiment. Dollar bulls will now look to clear 80.75/86, where 4-week trendline resistance and the 35-day EMA lie (also correlates to the EUR/USD's 35-day EMA & 23.6% retracement level near 1.39). Clearing these key pivots will suggest that the Greenback has temporarily bottomed and initially targets 82.68 (38.2% retracement) and 1.3724/83 (EUR/USD's former swing high/38.2% retracement level).
[STRATEGY] BUY DXY (SELL EUR/USD)
