Bulls return to play on Monday after a brief consolidation on Thu/Fri and eye new 20-year high at 107.60, as dollar remains well supported by global growth concerns, weak Euro and strong signals that the Fed will remain on strong hawkish path.
Traders focus on US June inflation report (due on Wednesday) as inflation is expected to rise further that would add to Fed’s hawkish stance ahead of policy meeting at the end of the month.
Probe through Dec 2002 peak at 107.31 requires close above this level to confirm bullish signal and expose next target at 108.74 (Oct 2002 peak) and 109.67 (Sep 2002), which guards psychological 110 barrier.
Bullish daily studies support the action, but overbought conditions warn that bulls may face headwinds.
Rising 5 DMA offers immediate support at 106.82, followed by bull-trendline off 103.49 (June 28 trough) at 106.00, which should keep the downside protected and maintain strong bullish bias
Res: 107.60; 108.74; 109.67; 110.00.
Sup: 106.82; 106.27; 106.00; 105.75.
