When projecting a USD bounce on December 28 we also established an initial and perhaps best bounce target around 102.50, which at that time included visual resistance and the daily EMA 20.
Considering the oversold state of RSI it would be best to be prepared for a bounce in USD, which could temporarily upset asset markets. As for a bounce objective, resistance at 102.50 looks like a reasonable level.
Asset markets appear to be upset this morning, at least in stock bubble * land, while gold and the miners are firm in pre-market. I think it’s a squall of profit taking in overdone stock markets now that the new tax year is upon us. An excuse to rally Uncle Buck from his oversold state. If USD takes out 102.50 the situation gets a little more intense for a test of the SMA 200 at 103.40. But for now let’s note that USD is approaching our initial bounce target.
* As usual I’ll qualify that with my view that the stock bull is actually the product of a bubble in monetary and fiscal policy.
