Tuesday January 5, 2010 - 18:57:36 GMT
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Forex Hound - www.forexhound.com
Housing Report Weakens USD JPY
The USD JPY broke
sharply this morning following the release of a housing report which
showed the number of contracts to buy previously owned U.S. homes fell
in November more than analysts had estimated.
weakness set the table for todayâ€™s opening weakness, following Mondayâ€™s
closing price reversal top. Last nightâ€™s follow-through to the downside
was confirmed which could mean the start of a correction all the way
back to 88.57. The first downside objective today is 91.08 which is an
uptrending Gann angle from the 84.83 bottom.
mid-session, the Dollar index is mounting a strong comeback because of
oversold conditions. Donâ€™t be surprised if this index closes higher for
the day. A short-term retracement to 77.77 - 77.93 is likely.
the U.S. Dollar continued its slide as investors sought higher risk
assets. Overnight an index representing a trade weighted basket of
currencies turned its main trend down on the daily chart on a trade
through 77.32. The chart pattern now suggests a correction to 76.31 to
75.80 is imminent. This move would represent a normal retracement of
the entire 74.17 to 78.45 rally. Traders are citing the stronger global
economy and low interest rates in the U.S as two reasons for the
renewed interest in higher yielding assets.
The EUR USD is
weakening at the mid-session after showing early morning strength. The
bigger picture suggests a move to 1.4680 is likely. Minor resistance at
1.4503 could slow down the current upside momentum. The weakening Euro
is setting up for a pull-back to 1.4350 - 1.4319.
The main trend
remains down in the GBP USD. Buyers tried to, but failed to hold the
British Pound in the retracement zone at 1.6036 to 1.5988. Concerns
about the U.K. economy and the upcoming election are putting pressure
on the Cable.
The USD CHF showed overnight weakness, but is now
in a position to mount a closing price reversal bottom after an eleven
day break. Based on the short-term range, watch for a retracement to
1.0379 to 1.0409. The bigger picture suggests a break to 1.0212 -
1.0143 is possible following this short-term correction.
gold and crude oil prices as well as firm equity market helped to
pressure the USD CAD. The main trend is down with 1.0265 the next
downside objective. A key retracement level at 1.0459 is the new
resistance. A firming Dollar is helping to trigger intra-day
Strong demand for higher yields helped rally the
AUD USD overnight. This morningâ€™s strength helped drive the Aussie over
a key retracement zone at .9144 to .9066. The intra-day strength in the
Dollar has brought the Aussie back inside of this range and has put the
market in a position to post a closing price reversal top.
USD is now in an uptrend, but finding resistance at a pair of down
trending angles at .7353 and .7375. A close over these angles will be a
sign of strength. Falling back below these angles will indicate a
profit-taking break is imminent. This could set up a substantial
correction to the downside.
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