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Daily Analysis Article

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Eventually the strong stock market and the weak dollar should decouple, but when?

Mon, Aug 3 2009, 18:13 GMT
by Ralph Shell

ForexRazor

EUR/USD Commentary and Trade Ideas

 GBP/USD Commentary and Trade Ideas 

There is no doubt about the strength of the pound as it races into high ground eclipsing the 1.69 handle. A recent Newsweek article which trashed the UK economy and that country's future world status is being dismissed by today's market action. The UK was branded as "Iceland on the Thames," in reference to Iceland's recent bankruptcy, and implied that the UK would soon join them. Reports of a stabilizing British economy, and perhaps some short covering has carried this pair quite a ways in the past few sessions. While the longer charts suggest a trip into the 1.70's is possible, perhaps current levels may be vulnerable to a little sell off.

Bias: Higher Bias Term: Medium Support: 1.6700 1.6590 1.6540 Resistance: 1.6900 1.6990 1.7090

USD/JPY Commentary and Trade Ideas 

Today's spurt in global equities has relegated the yen to the bottom of the pill, and even the maligned dollar can gain by comparison. We are currently trading at 95.15 bouncing up from a 94.60 low. Inclined to scalp the long side if the market relaxes a bit, with a target back in the 96 area.

Bias: Higher Bias Term: Medium Support: 95.00 94.40 93.20 Resistance: 95.60 96.20 96.90

 USD/CHF Commentary and Trade Ideas

  This mornings dollar weakness showed the way for a new yearly low at 1.05628. This is a level where thr SNB has shown some interest in intervention but the franc might be more related to the euro, and that relations is not as strong as with the dollar. Never the less, under 1.06, I prefer to be a buyer of the USD versus the SF.

Bias: Higher Bias Term: Long Support: 1.0570 1.0500 1.0420 Resistance: 1.0650 1.0700 1.0850

USD/CAD Commentary and Trade Ideas

 Despite a Canadian Bank Holiday the CAD continues to make headway against the US dollar. Strong equities and $70+ crude prices are propping up the CAD. Some late morning positive US economic numbers imply the US economic recovery has commenced, so ownership of energies and the CAD makes sense. Higher oil prices, however, will eventually act as a drain on the forthcoming recovery. Try to sell a pull back in the even we climb back to 1.07 and change.

Bias: Lower Bias Term: Medium Support: 1.0620 1.0550 1.0450 Resistance: 1.0690 1.0740 1.0850

AUD/USD Commentary and Trade Ideas 

The orderly climb of the AUD versus the dollar and other currencies continues as the commodity bulls rule. The New York University's Dr Nouriel Roubini, frequently called Dr.Doom was a big hit at a Digger and Dealers Conference in Western Australia as he casts his vote for an economic revival by year end. He did caution that higher oil prices will hurt the global economies later in 2010. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .8390 .8330 .8200 Resistance: .8450 .8500 .8590

NZD/USD Commentary and Trade Ideas 

With the commodity bulls in command, the Kiwi is gradually climbing today. We are trading at .6675 and quietly climbing higher. No trading suggestions.

Bias: Higher Bias Term: Medium Support: .6600 .6510 .6420 Resistance: .6690 .6750 .6950

Published on  Mon, Aug 3 2009, 18:19 GMT