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Daily Forex Technical Report − Dollar Made a Short Term Top Already?

Mon, Aug 18 2008, 07:49 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Daily Report

Dollar Made a Short Term Top Already?

Dollar retreats mildly as the week starts quietly. Technically speaking, dollar is displaying loss of momentum in most major pairs while suggest that a short term top is around the corner, if not formed already. Risk of a more noticeable pullback is growing but after all attentions should still be paid to intraday support in those pairs for confirmation. Otherwise, the greenback's rally could still extend further before pull back. Though, the overall outlook remains unchanged and retreat in dollar will be treated as correction in at least a short term uptrend for the moment.

On the data front, UK housing data remained weak. Rightmove house price index showed average asking price of houses fell -4.8% yoy in Aug, largest decline since at least 2002. Swiss retail sales growth slowed sharply from 7.4% yoy to 0.7% yoy, much lower than expectation of 3.2%. The calendar is rather light today with Eurozone Trade balance, Canadian international securities transactions featured as well as US NAHB housing market index featured.

More Technical Analysis Reports Here

USD/CHF Daily Outlook

Daily Pivots: (S1) 1.0920; (P) 1.0964; (R1) 1.1003; More

USD/CHF retreats mildly from 1.1007 after meeting mentioned 1.0999/1028 target. Bearish divergence condition in 4 hours MACD and RSI argues that a short term top around the corner, if not already in place. Break of 1.0832 minor support will confirm and bring deeper pull back to 1.0623 cluster support (38.2% retracement of 1.0010 to 1.1007 at 1.0626). But downside should be contained above 1.0403 support and bring rally resumption.

Though, note that before breaking of 1.0832 minor support, there is not confirmation of a short term top yet. Further rally cannot be ruled out and sustained trading above 1.0999/1028 will pave the way for next key medium term resistance at 1.1596.

In the bigger picture, the case that whole medium term down trend from 1.3283 has completed continues to build up with weekly MACD and RSI breaking their own down trend. Nevertheless, focus remains on the mentioned cluster resistance at 1.0999/1028 (100% projection of 0.9634 to 1.0623 from 1.0010 at 1.0999, 38.2% retracement of 1.3283 to 0.9634 at 1.1028). Sustained break of this resistance zone will indicate that whole rise from 0.9634 is possibly impulsive in nature and should target next cluster resistance at 1.1596 (161.8% projection of 0.9634 to 1.0623 from 1.0010 at 1.1610). On the downside, a break below 1.0010 support is still needed to confirm rise from 0.9634 has finished. Otherwise, further rally is still in favor after pullback.

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Published on  Mon, Aug 18 2008, 07:54 GMT