Dollar Rally Ends

Thursday, November 5th 2009 · Filed Under Market
Tags: Dollar

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Dollars !
The US Dollar Index retreated below support at 76, warning of a test of 75. Failure of 75 would offer a target of 74*. Recovery above 76 is unlikely, but would indicate a test of 77.50. In the long term, the primary down-trend is likely to test the 2008 low of 71.50, while breakout above 77.50 would signal that the down-trend has ended.

US Dollar Index

* Target calculation: 75 – ( 76 – 75 ) = 74 Euro The euro respected its lower trend channel, indicating another primary advance with a target of $1.52. Reversal below $1.47 is unlikely, but would warn of a secondary correction.

Euro US Dollar

* Target calculation: 1.50 + ( 1.50 – 1.48 ) = 1.52 Pound Sterling The pound is ranging between $1.60 and $1.66, indicating active management by the two central banks. An ascending triangle, however, at the upper border indicates buying pressure. Breakout above $1.66 would offer a target of $1.74*. Reversal below $1.64 is less likely, but would signal a test of support at $1.60.

Pound Sterling

* Target calculation: 1.66 + ( 1.66 – 1.58 ) = 1.74

Japanese Yen

The dollar is testing support at ¥90. Respect of support indicates a rally to test the upper trend channel. Reversal below ¥90 would indicate a decline to the December 2008 low of ¥87.

Australian Dollar

The Aussie dollar found support between $0.89 and $0.90. Expect an advance with a target of $0.96*. Reversal below $0.89 is unlikely, but would warn of a secondary correction. Australian Dollar US Dollar

* Target calculation: 0.93 + ( 0.93 – 0.90 ) = 0.96