Risk aversion continues to reign, and the USD continue to gain across the board, especially against the commodity currencies. The Euro also is pressured by the uncertainty of the Greek election and the relationship between new French president Hollande and German Chancellor Merkel. (Sarkozy has been agreeable to the German-led austerity measures).
The USD Index heavily weighed by the euro, therefore is in a strong breakout to the upside. The daily chart shows the market pushing above a recent declining trendline as well as the 80.35 pivot. This opens up a very short-term resistance pivot at 80.75 which was resistance in March 2012, but also resistance in Dec 2011 , and support again in Jan. 2012.
Above 80.75 and the 81.00 handle, the market opens up to 81.60, which was the resistance pivot Nov. 30/Dec.1 2010, and then again Jan. 2011. The market reacted there wish swings down to about 79.00 where it found support until mid-Jan.2011. Right above 81.60, the 82.00 handle was also the high from Jan. 2012. Therefore, the 81.60-82.00 zone is in sight as a potential target, as well as a potential resistance. An aggressive outlook for a reaction here is down to 79.00 like in the end of 2010-beginning of 2011. However, a conservative target could be back to the 80.75-81.00 area.
FXTimes
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