US Dollar Spikes to New Monthly High, Meets Intraday Resistance

by on May 27, 2014 7:01 pm BST

The US dollar spiked to a new 30-day high after durable goods beat analyst expectations. Data showed that durable goods increased .8 percent versus the .5 percent drop general consensus. April’s figure was well below the upward revised March figure, up 2.9 percent from 2.6 percent. The dollar and other risk assets – another “new” high for the S&P 500 – are higher on declining month-over-month durable goods data, go figure.

The 90-day 4H chart on US dollar futures show price action teetering off near the 61.8 percent Fibonacci level from the three-month high. A pullback to 80.458 is likely before a continued push higher. Dollar strength should continue, and a close above the 61.8 percent level would push price action to 80.628 before attempting to reach secondary price action resistance at 80.79.

Preliminary quarter-over-quarter gross domestic product will be out Thursday, and a poorer than expected figure will give dollar bulls a reason to take profits. In that case, deeper support at 80.27 is probable. Analysts expect a contraction of .6 percent versus original expectations of .1 percent. Economists have had to revise their “worst case” scenario, weather-related growth figures as growth was well below already reduced expectations. This is potentially signaling that problems in growth expansion are not just weather related.

4H Chart of DX

4H Chart of DX