Dollar Breakout Against The Yen

By Colin Twiggs
April 2, 2009 0:30 a.m. ET (3:30 p:m AET)

These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.

Euro

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.

Source: Netdania

Pound Sterling

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 ]).

Source: Netdania

Japanese Yen

The dollar completed a descending broadening wedge, offering a target of ¥105 (calculated as
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).

Source: Netdania

Australian Dollar

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 (calculated as
0.7250 + [ 0.7250 - 0.6000 ]).

Source: Netdania

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~ Frederic Bastiat