Dollar Finds Support
By Colin Twiggs
November 12, 2009 2:30 a.m. ET (6:30 p:m AET)
The US Dollar Index is testing support at 75, the blue candle astride the support line indicating pressure from buyers. A rally above 76.5 would indicate that the primary down-trend is ending, but continuation of the down-trend is more likely and failure of support would offer a target of 74*.
* Target calculation: 75 - ( 76 - 75 ) = 74
The euro is testing resistance at $1.50; two doji candles at the resistance level indicate uncertainty. Breakout above $1.505 would signal another primary advance with a target of $1.52*, while reversal below the lower channel line would warn of a secondary correction — confirmed if support at $1.47 is penetrated.
* Target calculation: 1.50 + ( 1.50 - 1.48 ) = 1.52
The pound retreated below the new support level at $1.66; penetration of the rising trendline would warn of a test of support at $1.60. Recovery above $1.66 would offer a target of $1.74*, while failure of support at $1.58 would signal a primary down-trend.
* Target calculation: 1.66 + ( 1.66 - 1.58 ) = 1.74
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The dollar broke through support at ¥90, indicating a decline to the December 2008 low of ¥87. A long tail on the latest candle indicates buying support, however, and recovery above ¥90 would signal another test of the upper channel border. Breakout above ¥92.50 remains unlikely, but would signal a primary trend reversal.
The Aussie dollar is hesitating at resistance at $0.93. Follow-through above $0.9350 would signal an advance to $0.96*. Reversal below $0.89 remains unlikely, but would warn of a secondary correction.
* Target calculation: 0.93 + ( 0.93 - 0.90 ) = 0.96
These are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value.
~ Thomas Paine, The American Crisis (1776 - 1783)