Wednesday, July 22, 2009

Savant

(QQQQ)(SPY)(DIA)

US Dollar Index

The US Dollar Index is testing primary support at 78.50; breakout would signal a primary decline with a target of 73*. Reversal above 0.81 is unlikely, but would test resistance from the March low at 83.

US Dollar Index

* Target calculation: 78 - ( 83 - 78) = 73

Euro

The euro broke out above the recent triangle against the greenback, signaling a primary advance with a target of $1.50*. Follow-through above $1.43 would confirm the signal. Reversal below $1.38 is unlikely, but would warn of reversal to a primary down-trend.

Euro US Dollar

* Target calculation: 1.43 + ( 1.43 - 1.37 ) = 1.49

Japanese Yen

The dollar respected the new resistance level at ¥94, but this will only be confirmed if short-term support at ¥92 is broken. Failure to test the upper trend channel would warn that the down-trend is accelerating — and likely to test the December low of ¥87* in the medium-term.

US Dollar Yen

* Target calculation: 94 - ( 101 - 94) = 87

Australian Dollar

The Aussie dollar continues its narrow consolidation between $0.78 and $0.82 against the greenback. The positive interest rate differential with major reserve currencies is driving demand. RBA selling of Australian dollars — accumulated when supporting the currency in late 2008/early 2009 — however, strengthens resistance. Almost A$2 billion was sold in June alone (WSJ). The CRB Commodities Index is also likely to hinder another advance until its secondary correction has clearly ended. Breakout above $0.82 would signal a primary advance with a target of $0.90*. Reversal below $0.77 is unlikely, but would test support at $0.70.

Australian Dollar US Dollar

* Target calculation: 0.80 + ( 0.80 - 0.70 ) = 0.90

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