The FX Trader’s view –
An earlier failed attempt to embark on a recovery phase, thwarted by a 23.6% resistance area, has seen the Dollar Index slipping lower. However, it could be that this is a final downleg…
-
MONTHLY CHART: The main sign in 2008 that long term bears were losing momentum was the breach of the bear channel top projection.
Subsequent resistance was found from the 38.2% recovery level.
Current weakness has tested/eroded the 61.8% pullback level and Dec-08 low (77.688) – how much lower this can go is unclear.
See Daily chart… -
DAILY CHART:
In the Guide we had been on the alert for further s/term bear pressure, and the recent breaks of the small channel base and 78.334 02-Jun low have confirmed the bears in control for now.
At this stage we note a Fibo projection at 76.40, ahead of the 75.17 76.4% level on the long term chart.
Characteristic of some other markets too (e.g. EUR/USD), note that a third and possible final impulsive leg (down in this case) is unfolding. We think it is right to be cautious about how long this trend lasts.
[For the complete and illustrated version of this and future Updates be sure to sign up at www.sevendaysahead.com]
