Archived IMT (2010.09.29)

USD INDEX LOOKING FOR 76 , which is the 18-month trend line support on the 6-currency basket (see chart http://chart.ly/6t8tn9a ) as EURUSD extends rebound past $1.36. A break below 76 on the USDX suggests protracted declines towards the 74 low (Nov 2009). 3 weeks ago I said EURUSD needed to break ABOVE its 200-day MA after the USDX broke BELOW its own 200-day MA. Well, now we need the same thing on the WEEKLY basis. The chart here shows USDX broke BELOW its 200-WEEK MA last week, thus, we need for EURUSD to break ABOVE its own 200-WEEK MA, currently at $1.3894, which coincides with the 61.8% retracement of the decline from the $1.5151 high (Nov 2009) to the $1.1876 low (June 2010). Thus, $1.38 appears as a conservative target for the next EURUSD advance.