SocGen say that the break in the dollar index is likely to spell doom for 110.00 in USDJPY
The break of 99 in DXY is 'ugly' pointing to a break of 110 in USD/JPY which seems inevitable
EUR/USD rally isn't only about the USD setback following the failure to pass the Healthcare Bill
Better European economic data, German voters voting for the status quo and a lack of disquiet about the French elections all allow post November 8 moves to be unwound
Also stays bullish EUR/GBP arguing that real yields suggest that sterling is vulnerable, and positioning data confirm the market is very short
The DXY is in very troubling territory as it hovers over what could be an even uglier break.
DXY daily chart
It's very easy to get caught up in the headlines coming thick and fast, particularly from US politics, which is why you can limit the noise factor by letting the charts do the talking. We can all pick a number out of thin air to guess where a price might go but we have no control over that. All we can do is watch the charts and trade the levels. Whether they hold or break determines the outcome, and there really is only two ways a price can go.
Should the DXY find support here, and helps USDJPY keep hold of 110.00, there's only one direction it's going to go.
eFX news have this quick note from ScoGen. Check out more from them here.
