Reply #17: daily dollar watch

[UpInArms]

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

Last trade 89.29 Change -0.01 (-0.01%)

Second Day For Majors’ Rallies Against Dollar

http://www.dailyfx.com/story/dailyfx_reports/daily_technicals/5835_second_day_for_majors_rallies_against.html

EUR/USD The EUR/USD pair sailed through former two month highs and the 50.0 fib of the 1.2589 – 1.1640 USD rally at 1.2085 and 1.2112 respectively following the largest one day gain in the euro since August of 2004. Though the pair has cleared significant resistance levels, the 1.2225-ceiling backed by a 61.8 fib and 200-day SMA looms just over the horizon. Price action has stopped short of this resistance; but its breach would leave the pair technically undefended for another 125 pips until the 76.0 fib at 1.2350, backed by consolidation areas throughout the second half of 2005, is reached. If the initial dollar retracement proves more than just a feigned attempt at taking back control, a greenback run could make quick work of the 1.2000 level before pushing to the ranged levels the pair was confined to in the final weeks of December. Indecision in the underlying seems to be fulfilling similar sentiment given by the indicators. Stochs are still pressing in the neutral range with the trend absent. Also noteworthy, momentum began to fizzle while the RSI has stopped short of reaching an overbought signal.

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USD/JPY A prominent doji formed in the Japanese Yen-backed major in Asian session trading confirming support offered by the December 19th swing low around 115.50. The confirmation of this level has in effect put USD/JPY in a range between it and resistance from the 50-day SMA up at 118.15. A run to this first strong level of yen strength looks to be a probable course for the pair. If dollar rallying pushes the pair beyond this level, consolidation back in November and December around 119.60 will be the next area for the bulls and bears to jostle for position. On the other hand, if the yen catches a second wind and breaks 115.50 support, it could be clear sailing for technical traders down to 113.75/95. A potent mixture of a 38.2 fib of the 101.70 – 121.45 USD rally and the July 20th spike high, not to mention the psychological significance of the 114.00 level, will offer a good base for dollar confidence to rebound. There is little consensus among the indicators for the pair, besides hints of indecision. The stochs and RSI despondently coast in neutral while the MACD tells little with its negative read and the ATR falls back off of its high mark. The ever weakening trend from the ADX however is showing signs of revitalization by nudging higher.

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