Dollar Breaks 100 Yen
By Colin Twiggs
April 9, 2009 1:00 a.m. ET (3:00 p:m AET)
The euro failed to test resistance at $1.37 and is now headed for short-term support at $1.31. Breakout would test primary support at $1.25. In the long term, failure of the band of support at $1.25 would offer a target of $1.00 (calculated as 1.25 - [ 1.50 - 1.25 ]). Recovery above $1.47 is unlikely, but would signal a primary trend change — and test previous highs at $1.60.
The dollar penetrated resistance at ¥100, providing confirmation of the recent breakout from a descending broadening wedge, then retraced to test the new support level. Respect of support would confirm the up-trend, with a target of ¥105 (calculated as 99 + [ 100 - 94 ]). Reversal below the rising trendline is unlikely, but would warn of a bull trap. In the long term, failure of primary support at ¥87 is also unlikely, and breakout above ¥100 offers a target of ¥110 (the August 2008 high).
The quarter percent rate cut by the RBA did not disturb the up-trend
of the Australian dollar against the greenback.
Respect of the rising trendline is likely, followed by a test of resistance at $0.7300.
Breakout above $0.7300 would offer a target of the September high of $0.8500
0.7250 + [ 0.7250 - 0.6000 ]). Failure of $0.60 now appears unlikely, but would target the 2001 lows between $0.48 and $0.50.
To be content with what we possess is the greatest and most secure of riches.
~ Marcus Tullius Cicero