The US Dollar Index ($USD) became oversold as RSI moved below 30 last week. In addition, notice that the index has retraced just over 62% of the March-June advance. A channel has taken shape since early June and traders should watch for a channel breakout to reverse this downtrend.

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The substance and meaning of Friday’s Stress test results are still be hotly debated. Financial pundits are putting enormous emphasis on the European open as the barometer of the market’s sudden confidence in the results. We are still unconvinced about the stress tests and doubt that a single market open/trading day will create the directional rush some participants are looking for. FX markets…