Reply #9: daily dollar watch

[UpInArms]

http://quotes.ino.com/chart/?s=NYBOT_DXY0

Last trade 83.94 Change -0.41 (-0.49%)

Euro, Dollar, Yen – All Caught in Crosscurrents

http://www.dailyfx.com/index.php?option=com_content&task=view&id=889&Itemid=39

Which is it - serious slowdown or continued growth? In the FX market these days the answer seems to change every half an hour as all G-3 economies report wildly gyrating results on a daily basis.
For trend traders this week has been a true nightmare as EUR/USD broke the 1.2900 barrier only to come screaming back to 1.2980 after shockingly poor US Durable Goods yesterday which recorded the worst decline since 2002. No more than three hours later the pair was back trading near day's lows as oil slipped to $51/bbl on higher than expected inventory numbers.

This type of grinding, directionless range trading is unlikely to change as G-3 economic reports continue to send mixed messages. Tonight's data is a case in point. In Japan Industrial Production unexpectedly fell to -0.3% from 0.1% projected mainly on a large drop in production of train cars and ships. At the same time Japanese PMI rose to 53.3, the highest rate since September 2003. Meanwhile in Europe German unemployment numbers reported the first decline in 16 months decreasing by -79K, but the number is subject to so many adjustments based on new unemployment measurement rules in effect since beginning of the year that the market chose to ignore it. On a more consistent EU definition standards German unemployment remains at troublesome 9.4% level.

Are global economies heading into a funk? Recent economic evidence certainly suggests so. Looking ahead to today's US GDP the market whisper number is already ratcheting down expectations to 3.0% from 3.4% expected. Perhaps the best news for growth bulls is the fact that oil is starting to finally recede from record highs. If crude breaks the $50/bbl and remains in the $40's for most of the summer world economy should receive a healthy boost with the dollar and yen the prime beneficiaries. For now however it's the race for "least worst performer" amongst the majors as volatility continues to shrink and FX markets flounder looking for direction.

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Dollar Clashes With Majors Over Key Levels

http://www.dailyfx.com/index.php?option=com_content&task=view&id=900&Itemid=39

EUR/USD - Euro and dollar bulls locked horns once again with EUR/USD testing the bids below the 1.2900 figure. Following a brief foray below the 1.2900 level the euro longs managed to bid the dollar back and pushed the pair back into the consolidation range.

As the stalemate continues, the euro bulls and greenback longs maintained their defensive positions in case either side decided to launch another counterstrike. Euro continues to rely on a minor support at 1.2876, an Apr 18 daily low, with an intermediate resistance remaining at 1.2797, an Apr 5 daily low, A major support remains intact at 1.2766, an Apr 14 daily low, as euro longs keep bidding the pair at 1.2900. In case the euro longs attempt to retake the psychologically important 1.3000 figure, they will encounter a minor resistance at 1.2999, a 10-day SMA, which continues to defend the 1.3039, an intermediate resistance created by the 38.2 Fib of the 1.3481-1.2769 dollar rally. Major resistance remains at 1.3125, a 50.0 Fib of the Mar-Apr dollar rally. Oscillators are mixed; with Stochastic dipping below overbought line at 65.89 on the daily chart and is treading above the oversold line at 28.52 on the dealer (4HR) chart. RSI remains neutral on both the daily chart at 42.16 and on the 4-hour chart at 40.35. MACD is making a bearish crossover below the zero line on the daily chart and remains below the zero line on the dealer (4HR) chart.

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USD/JPY - Yen continues to oppose the dollar as the battle is heating up for the control over the direction of the pair as both majors remain locked in nonstop combat over the 106.00 figure. The battle lines remain intact as both the yen and the dollar failed to test each other's defenses with the dollar defenses remaining intact at 105.56, a minor support created by an Apr 24-25 consolidation low for. An intermediate support at 105.26, a 50.0 Fib of the 101.65-108.87 dollar rally remains the second line of defense. A major support at 104.64, a Mar 18-21 consolidation low is still intact as yen longs failed to advance toward the 105.00 figure. As the greenback readies for another round versus the yen, dollar longs will encounter a minor resistance at 106.11, a 38.2 Fib of the 101.65-108.87 dollar rally, with 106.48, a 10-day SMA, acting as an intermediate resistance. A major resistance at 107.17, a 23.6 Fib of the Jan-Apr greenback rally remains a tempting target for the dollar bulls, as a break out above will most likely target 108.88, a 2005 high and a gateway to a psychologically important 110.00 level. Indicators are mixed, with Stochastic oversold on the daily chart at 14.24 and neutral at 45.18 on the dealer (4HR) chart. RSI remains neutral on both the daily chart at 40.97 and at 43.14 on the 4-hour chart. MACD continues to slope down toward the zero line on the daily chart and is slopping upward toward the zero line on the dealer (4HR) chart.

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Dollar Hit Anew on China FX Speculation

http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=8343591&src=rss/businessNews

LONDON (Reuters) - The dollar fell to its lowest level against the yen in more than a month and weakened versus the euro on Friday, pressured by prospects of a revaluation of the Chinese yuan and disappointing U.S. growth.

China's state-run China Securities Journal fanned new talk of an imminent revaluation by saying that deepening reforms of commercial banks and the foreign exchange market have created conditions for the country to adjust the yuan.

The yuan jumped briefly above its official trading range on Friday, but dealers attributed the move to a glitch in China's currency dealing system and Chinese officials quickly moved to counter talk of an impending move.

The yen, which is seen as a proxy trade for the yuan, still gained, rising one percent on the day against the dollar.

"(The yuan's rise) set off speculation they are testing the market for a potential move and this demonstrated how sensitive the market is to any rumors of a revaluation," said Kristjan Kasikov, currency strategist at Calyon.

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Wow! Yesterday's market movement was huge!

Have a Great Day Marketeers!