Strengthening Dollar

The falling euro strengthens the US Dollar Index which broke through resistance at 76.00. Breakout completes the base which has been forming over the past 5 months. Retracement is likely; and respect of the new support level at 76.00 would confirm a primary up-trend, while failure would warn of a bull trap.

US Dollar Index $DXY

* Target calculation: 76 + ( 76 – 73 ) = 79

Crude

The strengthening dollar caused crude prices to soften, with Brent crude headed for another test of support at $104/$105 per barrel. Failure of support would warn of a down-swing to $90, but breakout above the descending trendline is equally likely and would suggest a new primary advance.

Brent Crude Afternoon Markers (2nd nearest future contract)

* Target calculation: 105 – ( 120 – 105 ) = 90

The spread between Brent and Nymex WTI crude narrowed to $20. An increase in supply from Libya or Nigeria would help to lower Brent prices further.