TheLFB-Forex.com A Forex Trader Portal
Currency Pair Overview:
Dollar Index Finds Buyers
Overall, the dollar index started slowly to add points during the Asian session and continued doing so throughout the first part of the European session. Right now, every major currency is trading below Tuesday’s opening price against the dollar, even thought the U.K. sterling and Japanese yen currencies showed some resilience. The dollar’s uptrend seen overnight reflects the selling from the equity markets, and echoes Mr. Bernanke’s latest comments, which called for a stronger dollar.
Dollar Index Technical View: TheLFB Member Charts
4 Hour Chart: Mixed. Main price points: 74.70, and 75.77. Looking for: Wave V)
The dollar index traded lower recently, and the market found buyers around the 74.70 area, and at the support line connected from October 22nd. This could a bullish reversal bounce, but traders still need to see a break of 74.77 resistance for a near-term long confirmation.
Dollar support around 75.00 looks very strong which indicates that the bottom of the short blue wave V) may be near.
The euro (EUR/USD 1.4900) moved almost exclusively lower during the overnight session, but the pace at which it fell accelerated throughout the morning European trade. Since the day started, the euro fell 90 pips, and has reached TheLFB Support 1 (1.4895) area, which is also the support area formed by the 20-day moving average.
Euro Technical View: TheLFB Member Charts
4 Hour chart trend: Mixed. Main price points: 1.4820, and 1.5062. Looking for: Complex wave II/B
The price action on the EUR/USD chart looks weak for the near-term trade, especially after Mr. Bernanke's speech from on Monday that created volatility in the pair. After his speech the euro failed at the long test of the 1.5000 physiological level, which seems to be a bearish signal for now.
As such, the market may still be trading in a corrective channel of a more complex red wave II/B structure. Traders will look for a move into the short side of a corrective channel, near to the 1.4800 zone, so long as the market holds 1,5000 resistance.
The pound (GBP/USD 1.6800) and the yen were the only major pairs that managed to strengthen during the European session. However, the pound reversed shortly after the U.K. CPI numbers hit the newswires. Interestingly, the CPI numbers were rather bullish for the pound, but has not been enough to stop the overall Usd strength.
TheLFB Trade Plan of the Day is one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, as well as S&P futures, oil, gold, and the dollar index.
The aussie (AUD/USD 0.9275) is currently trading at TheLFB Support 2 (0.9270) area, following broad weakness seen in the financial market. The aussie’s sell-off was also influenced by the Reserve Bank of Australia’s minutes, where the central bank seemed undecided on the pace of interest rate adjustment.
The cad (USD/CAD 1.0575) was the strongest pair among the majors in Tuesday trade, moving 110 pips from the overnight session. The cad’s uptrend is rather interesting, since the pattern of the last few months of trading saw the pair lagging behind the rest of the market during the overnight trading hours. On the daily chart, the cad is approaching the 1.0620 resistance area, where the 20 and 50-day moving averages meet.
The swissy (USD/CHF 1.0130) had a range of 80 pips during the overnight session, flanked by the 20-day moving average and by the 1.0050 support area. This happened, even though the pair saw very thin momentum over the last few days of trading.
The yen (USD/JPY 89.05) re-tested the 88.70 area during the overnight session, the same place where the it formed a swing point low in Monday trade. A break below this support area would clear the road down to the 87.00 level, where the Usd/Yen bottomed in late January 2009.