Yen Double Bottom
By Colin Twiggs
February 25, 2009 8:00 p.m. ET (12:00 midday AET)
The euro is testing a band of primary support between $1.23 and $1.25. Uncertainty over almost $1.5 trillion of European bank loans to Eastern Europe is weighing on the euro. Failure of support would offer a long term target of $1.00; calculated as 1.25 - ( 1.50 - 1.25 ). Recovery above short-term resistance at $1.30, while less likely, would signal a bear market rally.
The dollar broke through resistance at 95 against the yen, completing a double bottom with a target of 103; calculated as 95 +( 95 - 87 ). This signals reversal to a primary up-trend, but it would be prudent to wait for confirmation before making any long-term commitment. Ideally from a retracement that respects the new support level. Failure of primary support at 87 is now unlikely, but would target the 1995 low of 80.
The Aussie dollar is testing a narrow band of medium-term support between $0.6250 and $0.6300. Failure is more likely, and would test primary support at $0.60. Recovery above medium-term resistance at $0.6850, on the other hand, would signal another test of $0.7250. In the long term, the primary trend is down and failure of $0.60 would target the 2001 lows between $0.48 and $0.50.
There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion.
It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.
~ Richard Feynman (1918 - 1988)