All four majors had a big week. The EUR/USD did complete the week with the largest 1 week move since inception. The second largest was the turn from ’04 to ’05. A total of 1626 points were given up to the dollar by the four majors. This would certainly signal that the dollar may be on its way back. After a week like that, a break will almost certainly follow. Then again we were all surprised by last week’s move.

EUR/USD

One…Two…And inhale. The pair is finally taking a breath. After the long exertion from last Thursday the pair has retraced to 1.5082. The big question everyone is asking is this the USD breakout long waited for. EUR/USD is now finding support on the 50 week moving average, first time since mid 2006.  This is a good resting place for a test of previous support turned possible resistance 1.5300/35. The EUR GaP is wide open and could use a small retracement before continuing on. 1.4500 is calling though and should the move continue, a 1.5000/1.4300 range could establish itself before further weakness.

GBP/USD

Of the four majors GBP/USD and USD/JPY look most likely to be stuck in their old ways. However, Sterling could be just extending its range a bit. Where it sits now is the shelf that was rejected in March of ’07, turning former resistance for ’06 into support. Should the move from last week be simply just stretching the range, 1.9363 will be first resistance. On extension, a small retreat in GBP GaP, then only minor stops on the way to 1.9025

USD/JPY

USD/JPY is the first to reset on the 15 min charts and with that comes the notion the pair is having a hard time hanging on to 110.00, currently at 109.87. Hourly charts are showing a diverging RSI pattern, which doesn’t look good for the pair’s ability to build on its recent gains.

USD/CHF

The pair ended its stellar rise fourteen points shy of 1.0883, which is the daily low form 11/23/07. This was a major turning point higher before the late December 07 run down to the same area and the collapse to below parity. This area provides formidable resistance on the move higher. Once this area gives we can assume the dollar really is on a return to higher levels and not just a really good head fake.

Email (will not be published)

Name

Title

Comment
 remaining characters

Post