This morning’s positive release of Durable goods has provided the reasoning behind the dollar’s rise.  This move is setting the stage for next week. Tomorrow’s release of German CPI and USD GPD will provide the last piece of the puzzle. Should the CPI number be higher than expected, and the GDP number better than expected, the dollar rise will get underway in earnest after the long holiday weekend. The US markets will be thin Friday with the early departures thin Monday with the US holiday. Be careful on these thin market days, you can get whipped out of a position in no time at all. 

EUR/USD

The pair plumed a new daily low yesterday. RSI couldn’t keep up and some divergence has now formed. Today’s price action after the better than expected Durable Goods report has been muted so far. The Dollar is gaining against the Euro and the pair seems likely to test yesterday’s low of 1.4570 before the week is out. After today the market starts to thin and the action could be rather punchy. If 1.4910 falls to the topside then 1.5100 comes into focus.

GBP/USD

The pair has made a rather significant downward push this morning without a System Signal Short and the GaP is blue but over the trigger line. When the System Signal Short does print the move is over. If you are short this pair, get ready to close your trade or move your stop lower. The S1 line has been drilled and the GaP lines will need to close ranks before a further push lower. Nothing should be lost on the fact that 1.8300 was broken this morning, with a daily close below here the pair is set for 1.7047.

USD/JPY

USD/JPY is finding it hard to escape this range, and as of now can’t even test the top or bottom. I read another article this morning calling for 120. Sometimes the more it’s talked about the more people want it to happen. However there is a lot of wood to chop before this happens. 114.68 high from 12/28/07 still has to fall and most likely will offer a great deal of resistance. The bottom channel line is steadily rising and the sideways move may create the touch before the rise.

USD/CHF

The System Signal Long finally showed this morning at 12:30 PM EST. This negates any further move to the top side, for today. As of now price action is roosting above the Daily Pivot Point at 1.1013. Price is looking to the topside to try and make yesterday high of 1.1088. A down trending line on the GaP from the high on 8/11/08 should keep the lid on price action throughout the long weekend.

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