Dollar rides on the misfortune of Euro rises sharply across the board today. Euro has already been under much press on news that EU will seek IMF to play the central role in providing financial aids to Greece. Additional pressure is seen from news that Portugal's debt was downgraded by Fitch to AA- with a negative outlook. Investors are deeply concerned with fiscal problem in southern European countries and the prospects for respective economies. While dollar rises sharply against Euro, it also manages to strength against other major currencies.
Additional buying of dollar against yen is seen after solid durable goods reports which saw headline orders rose for the third month by 0.5%. Ex-transport orders was also impressive by rising 0.9% in February. Data released from Eurozone today saw PMI manufacturing and services both improved to 53.7 and 56.3 respectively in March. German Ifo business climate also jumped to 98.1 in March. However, the data provided little support to the common currency.
Dollar index's strong break of 81.34 resistance confirms that whole medium term rise from 74.19 has resumed and should now be targeting 61.8% projection of 76.60 to 81.34 from 79.51 at 82.43 next. Meanwhile, in case of retreat, dollar index should be contained by 80.55 support and bring rally resumption.
USD/CHF Mid-Day Outlook
Daily Pivots: (S1) 1.0533; (P) 1.0586; (R1) 1.0625; More.
USD/CHF's strong break of 1.0660 minor resistance indicates that rise from 1.0506 has resumed and flips intraday back to the upside for 1.0809 resistance next. Break there will suggest that whole whole medium term rise from 0.9916 is resuming and should target 61.8% projection of 1.0131 to 1.0897 from 1.0506 at 1.0979 next. On the downside, below 1.0656 minor support will turn intraday bias neutral and bring consolidations. But downside should be contained well above 1.0546 support and bring rally resumption.
In the bigger picture, medium term correction from 1.2296 should have completed with three waves down to 0.9916 already. Current rise from 0.9916 is tentatively treated as resumption of the long term up trend from 2008 low of 0.9634. Sustained break of mentioned medium term trend line resistance (now at 1.0818) will further affirm this view. In such case, we'd be looking at stronger rise to 1.1963/2296 resistance zone in medium term. On the downside, sustained break of rising trend line support (now at 1.0502) will suggest that rise from 0.9916 is completed. The three wave corrective structure will in turn argue that another low could be seen below 0.9916 before USD/CHF makes a bottom.