Tuesday May 17, 2005 - 09:32:29 GMT
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ACM REFCO - www.ac-markets.com
Dollar prepares to defend its gains against majors
Previous session overview:
Euro crosses posted the biggest gains with euro gaining against the Cable, Canadian dollar and the Aussie. Dollar continued to dominate price action against the cable and the antipodeans. Cable crosses posted the biggest one-day declines with £/Yen losing close to 1.5% from the previous session
EUR/USD * Euro bulls made a stand against the advancing dollar bulls and managed to temporarily hold off the dollars progress. As the euro bulls and the greenback longs continue to oppose each other, defensive positions shifted before as the clash of the titans is about to take place. Euro bulls continue to rely on defences from the previous session, with minor support at 1.2541, Mar 1, 2004 daily spike low. An intermediate support at 1.2495, a Feb 20, 2004 daily spike high, remains intact, with major support seen 1.2462, a July 19 daily high. The psychologically important level at 1.2000, a start of the 1.2000-1.3667 euro rally remains a key target for the greenback bulls as a break below the 1.2000 will most likely see the pair test the bids around 1.1760, a 2004 low. As the greenback longs get ready to resume their advance, their defensive positions have shifted with euro longs encountering minor resistance at 1.2668, an Oct 25 daily low. If the euro bulls manage to push their way through the initial dollar defences, they will meet an intermediate resistance at 1.2716, 5-day SMA, with major resistance seen at 1.2803, a 10-day SMA. Oscillators are mixed, with Stochastic oversold on the daily chart at 12.21 and neutral at 42.73 on the dealer (4HR) chart. RSI is oversold on the daily chart at 27.02 and is treading above the oversold line at 33.26 on the 4-hour chart. MACD remains below zero line on the daily chart and made a bullish crossover below the zero line on the dealer (4HR) chart.
USD/JPY * Yen bulls charged the dollar positions in an all out attack taking the advancing greenback bulls completely by surprise. As the dust settled, dollar longs retreated and redeployed their defences at the lower levels, with minor at 106.54, a 50.0 Fib of the Apr-May yen bull swing. An intermediate support at 105.98, a 38.2 Fib of the 108.89-104.16 yen rally, currently defends the major support at 105.73, a 10-day SMA, from the yen longs. As the dollar bulls readying themselves for a counterattack, vanguard dollar forces will encounter a minor resistance at 107.48, an Apr 20 daily spike high. An intermediate resistance is seen at 107.89, a 78.6 Fib of the 108.89-104.16 yen rally, wit ha further breakout meeting a major resistance at 108.47, Apr 12 daily spike high. Indicators are mixed with Stochastic slopping upward toward the overbought line at 61.08 and approaching the oversold line at 29.29 on the dealer (4HR) chart. RSI is neutral on the daily chart at 59.08 and is neutral at 59.74 on the 4-hour chart. MACD is slopping upward toward the zero line on the daily chart and made a bearish crossover above the zero line on the dealer (4HR) chart.
GBP/USD * Cable bulls were hit hard once more as the dollar invasion continued, with advancing greenback longs capturing additional territory from the sterling. As the dollar bulls maintain their advance, cable bulls shifted their defences with minor support at 1.8309, a Nov 5 daily spike low, providing the first line of defence. An intermediate is seen at 1.8225, an Oct 22 daily spike low, with major support being established at 1.8137, a 78.6 Fib of the 1.7752-1.9550 cable rally. In an instance of the pound longs decide to retaliate, they will meet a minor resistance at 1.8440, a 61.8 Fib of the 1.7752-1.9550 sterling rally. A move deeper into the dollar held territory will encounter an intermediate resistance at 1.8505, a Feb 10 daily spike low, with a break in the greenback defences colliding with a major resistance at 1.8595, a Mar 28 daily spike low. Oscillators remain aligned. Stochastic is extremely oversold on the daily chart at 8.68 and remains oversold at 14.24 on the dealer (4HR) chart. RSI is oversold on both the daily chart at 23.47 on the 4-hour chart at 22.02. MACD remains below the zero line on the daily chart and is getting ready for the bullish crossover below the zero line on the dealer chart.
USD/CHF * Swissie remained neutral as the price action ground to a halt after the dollar bulls pushed the pair up against the 2005 high, but failed to advance further as momentum waned in light of the recent gains made by the dollar bulls. As the Swissie and the greenback bulls continue to lock horns, defensive positions on both sides remain intact, with dollar bulls continuing to rely on a minor support at 1.2197, an Apr 14 minor swing high. An intermediate support at 1.2146, an Apr 5 daily spike high, continues to defend the major support at 1.2076, a 50.0 Fib of the 1.2858-1.1288 CHF rally. As the dollar bulls continue to target Swiss Franc positions, they will encounter minor resistance at 1.2320, a June 8 daily spike high. A further advance will meet an intermediate resistance at 1.2379, an Aug 16 daily low, with major resistance remaining intact at 1.2405, an Aug 20 daily low. Oscillators are mixed. Stochastic is overbought line on the daily chart at 86.64 and is neutral at 51.39 on the dealer (4HR) chart. RSI is overbought on the daily chart at 70.78 and is dipping below the overbought line at 60.47 on the 4-hour chart. MACD is treading above the zero line on the daily chart and made a bearish crossover on the dealer (4HR) chart.
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