Dollar Sinks Against The Yen
By Colin Twiggs
July 8, 2009 9:00 p.m. ET (11:00 a:m AET)
US Dollar Index
The US Dollar Index continues to consolidate in a narrow band between 79.50 and 81. Downward breakout in the direction of the primary trend is more likely and would warn of a down-swing with a target of 73. Penetration of support at 78.50 would confirm. Upward breakout is not expected, but would test resistance at 83.
The euro is headed for another test of medium-term support at $1.37. Failure would warn that the up-trend is weakening, while reversal above $1.42 would indicate a primary advance with a target of $1.49/$1.50 — calculated as 1.43 + ( 1.43 - 1.37 ). Breakout above $1.43 would confirm the advance.
The dollar commenced a primary down-trend against the yen, signaled by breach of support at ¥94. Retracement that respects the new resistance level (at ¥94) would confirm the signal. Expect a test of the December low of ¥87.
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UK Pound Sterling
The UK pound is testing support at $1.60 against the greenback. Failure would indicate a secondary correction, with a target of $1.50, while respect of support would favor a primary advance to the upper trend channel.
The Aussie dollar penetrated support at $0.78 from its recent consolidation against the greenback
— warning of a secondary correction. Follow-through below $0.77 would confirm the breakout, while reversal above $0.79 would warn of a bear trap. Upward breakout is now unlikely, but would offer a target of the September 2008 high at $0.85. Downward correction is likely to test support at the January 2009 high of $0.73.
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If we're looking for the source of our troubles, we shouldn't test people for drugs,
we should test them for stupidity, ignorance, greed and love of power.
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