The US Dollar dropped to fresh 11-month lows as Gold crossed above the key psychological 1000 threshold on Tuesday. The DXY lost key trendline support as the EUR/USD broke above trendline resistance and the formerly resistant June swing pivot high at 1.4338. The subsequent dollar weakness has led to a test of a key Fibonacci retracement near 1.46 (61.8% of the 2008 highs to the 2009 lows). This key pivot should provide decent resistance as the other key retracement levels (38.2% & 50%) were previously respected by the market. Moreover, the DXY remains comfortably within a large falling wedge which tend to be bullish and while Gold continues to struggle with the 1000 level, the dollar should be able to withstand the current bout of weakness.
