Dollar Breakout Against The Yen
By Colin Twiggs
April 2, 2009 0:30 a.m. ET (3:30 p:m AET)
The euro found support above $1.30, consolidating in a narrow range below $1.34. Reversal above $1.34 would indicate a healthy up-trend, testing $1.37 in the short-term, but offering a target of $1.45. Breakout below the recent low of $1.31, however, would warn that the rally has ended and a test of $1.25 is likely. In the long-term, failure of the band of support between $1.23 and $1.25 would offer a target of $1.00 (calculated as 1.25 - [ 1.50 - 1.25 ]). Recovery above $1.47, on the other hand, would signal a primary trend change — and test previous highs at $1.60.
The euro formed two lower highs at £0.95: a bearish pattern. Penetration of support at £0.91 would warn of a test of primary support at £0.87. In the longer term, a break of £0.87 would confirm reversal to a primary down-trend — offering a target of £0.79 (calculated as 0.87 - [ 0.95 - 0.87 ]).
The dollar completed a descending broadening wedge, offering a target of ¥105
99 + [ 100 - 94 ]). The last downward swing reversed before the lower border, providing early warning of a breakout. Penetration of resistance at ¥100 would provide further confirmation. In the long term, failure of primary support at ¥87 is now unlikely, and breakout above ¥100 would offer a target of ¥110 (the August 2008 high).
The Australian dollar dipped briefly below the first line of support against the greenback,
at the February high of $0.6850, before recovering to signal a healthy up-trend.
Expect a test of resistance at $0.7300.
Another rate cut by the RBA, however, would impede further progress.
In the long term, failure of $0.60 now appears unlikely, but would target the 2001 lows between $0.48 and $0.50.
Breakout above $0.7300 would offer a target of the September high of $0.8500
0.7250 + [ 0.7250 - 0.6000 ]).
It is impossible to introduce into society a greater change and a greater evil than this: the conversion of the law into an instrument of plunder.
~ Frederic Bastiat