King Dollar hasn’t had much to brag about the past 6-months, as it has decline nearly 10% this year. The decline took it down last week to test a potential dual support point, that could be important. See support and reversal point in the chart below-
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Last week King$ found itself testing potential dual support at (1). While testing this potential support point, it created a “bullish wick/reversal pattern.” While support was being tested at (1), weekly momentum was oversold, hitting a level not seen in years. The Euro also found itself at an interesting price point, as bullish sentiment in the Euro was hitting levels, not seen many times over the past decade. Chart from Sentimentrader.com
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While the US$ was weak, the Euro has been strong this year. The rally in the Euro has it testing old support as new resistance at (3). At the same time the Euro could be testing resistance, is is now pretty easy to find investors bullish the Euro at (2). A few times in the past when bullish sentiment towards the Euro was high at each (1), the Euro was closer to highs than lows.
Due to the support test, momentum being oversold and Euro bulls easy to find, Premium Members took a position in this space last week, that is going against the crowd with a tight stop.
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