Friday, December 16, 2011

Resistance is now Support

The Dollar appears to be setting up a bull flag or consolidation just above its new support level. The consolidation pattern is a sign of profit taking that can be expected from the recent breakout. The highlighted section of the chart illustrates a similar profit taking event before prices resumed higher.The 10 day moving average should catch up to prices as they continue to consolidate. By the time prices pullback to the purple line, both price and the purple line should reach horizontal support. Together the 10 day moving average and horizontal support will act as a level of dual support . This area will be met will new demand that will rocket prices higher to test the next resistance level at $81.50.
Have a great weekend and be around for tomorrow's weekend report.

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