The US Dollar Index continues to probe a 4-week trendline at 80.86. While the Greenback traded higher against most currencies on Wednesday, the main reason it has not breached key resistance is due to Yen strength. Increased risk aversion, highlighted by equity weakness (specifically the confirmation of distribution patterns) has allowed the Yen to flourish in this enviroment. Meanwhile, the EUR/USD has retreated below the 35-day EMA & 23.6% retracement zone at 1.3907, but has paused at 1.3839. This pivot point coincides with a fibonacci retracement of the latest range (78.6% of 1.3737/1.4170) and the 50-day MA. The clearance of 1.3839 and 80.86 immediately exposes 1.3724/83 (EUR/USD's former swing high/38.2% retracement level) and 82.68 (DXY's 38.2% retracement) .
