The dollar index (=DXY) seems to be forming a bottom here for the time being, having fallen another 2% since the last Morning Call. After all, we were prepared for this: “With regard to the dollar index (=DXY), however, the bearish scenario is still valid. Shorts are only at serious risk above the 104.40/55 resistance zone” (MC #173) The index is currently trading at 102.89 slightly below the middle of the 99.57 / 107.35 year range. A small recovery or at least a sideways movement could now also follow with regard to the individual Dollar crosses. Nevertheless, a retest of the 101.50/00 support zone could still be on the agenda by the end of the year.
EURUSD -- 1.0977
The currency pair has finally made it above the 1.1000 level, which means that the upper side of the 1.0500/1.1000 range has been completed. I cannot say whether the recent rally here is already over. Despite the overbought levels, there is certainly still room for one to two big figures higher spot level. For medium-term players with a real need for dollars, spot level above 1.1000 should nevertheless appear interesting. And that is also justified.
GBPUSD -- 1.2687
Since the last major low on October 4, the pound has gained around 5.75% against the dollar. With the highs of yesterday and today, the 61.8% Fibonacci retracement level (1.2719) of the move down from 1.3141 (13jul) to 1.2037 (04oct) was also reached. The rally could therefore be over for the time being. Nevertheless, possible short attempts must be closely monitored. Falling dollar yields and the positive risk sentiment do not exactly point to a sudden strengthening of the dollar.
USDCHF -- 0.8774
The Swiss franc is grinding slowly but unstoppable higher against the dollar. The last two daily candles are likely to have flushed many dollar longs out of the market after the last minor support at the 0.8823 level failed to hold. However, with somewhat lighter positioning and oversold levels, a small recovery could now begin. Where to place the stop is a question of money management. In the chart, I see no further support below 0.8745 until the yearly lows.
Good luck,
Sebbo