The US Dollar Index continues to trade within a sideways triangle (consolidation) formation while risk aversion has seemingly abated. The recovery in risk appetite should be viewed as an overdue technical correction as opposed to a fundamental shift in investor sentiment. The inability to extend weakness caused a short-covering reversal, enabling several indices to form a short-term double bottom. Daily bullish MACD divergence and oversold RSI allowed Gold to recover, highlighting support at a key fibonacci level at 912.27 (61.8% of 864 to 990). The USD/CAD failed to clear a key fibonacci retrace at 1.1655 (38.2% of 1.0782-1.3068) and fell below corrective trendline support as a result. Meanwhile, the EUR/USD and the rest of the currency market remain comfortably rangebound and will continue to eye developments in equity and commodity markets .
