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Dollar Launches Surprise Move Against Majors

By Sam Shenker
13 June 2005 07:15 GMT


EUR/USD – Euro bulls were once again under attack by the dollar longs as the weekend gave no relief to the single currency from the unrelenting onslaught by the greenback bulls. As the pair continues to head toward the psychologically important 1.2000 figure, a move toward the handle will most likely end in a reversal as the dollar traders about to lose the control over the price action. A move to the upside will most likely see the pair test the offers below the 1.2400 figure, with a further move to the upside being capped by 1.2500 figure. Indicators signal a maturing trend with ADX (DMI) on the daily chart at 41.57. Stochastic is treading below oversold line on the daily chart at 15.51, which is indicative of a trending market. The Stochastic on the dealer (4HR) chart is also oversold at 15.07. RSI is oversold on the daily chart at 16.23 with the 4-hour chart RSI treading along the oversold line at 31.52. MACD remains deep below the zero line on the daily chart and is sloping downward below the zero line on the dealer (4HR) chart. In case the reversal fails greenback longs will most likely resume their advance and push the pair below the psychologically important 1.2000 figure.

Key Levels

Level

Resistance

Details

1.2357

Major

78.6 Fib of 1.1992- 1.3667 Euro rally

1.2255

Intermediate

10-day SMA

1.2174

Minor

June 9 daily spike low

Level

Support

Details

1.2027

Minor

Sep 8 daily spike low

1.1992

Intermediate

Aug 30 daily spike low

1.1895

Major

May 20, 2004 daily spike low




USD/JPY – Japanese Yen once again faced the offers around the 2005 high following another attack by the dollar longs. As the pair left a triple top formation in its wake, the price action will most likely going to be dominated by the yen traders with the pair aiming toward the 106.50, a recent swing low and a triangle’s lower boundary. A break in the triangle’s lower boundary will most likely see the pair touch 104.50, thus establishing a triple bottom, which would create an interesting trading setup, where the break below will see continuing domination by the yen longs with the pair aiming for 101.00. A reversal will confirm strength by the dollar bulls and will most likely see the pair move toward the 109.00 figure. Indicators signal trend reversal, with ADX (DMI) dropping to 21.80. Stochastic is neutral on the daily chart at 36.85 with Stochastic on the 4-hour chart treading above the overbought line at 85.3, thus providing yen bulls with a chance to mount a counterattack. RSI is treading below the overbought line at 63.37 on the daily chart, with dealer (4HR) chart RSI dipping below the overbought line at 67.46. MACD is about to make a bullish crossover above the zero line on the daily chart, with MACD on the 4-hour chart treading above the zero line. If the yen bulls retreat, a move to the upside will most likely see the USD/JPY rocket through 109.00 and target the 110.00 figure, with a breakout targeting the 115.00.

Key Levels
Level

Resistance

Details

109.83

Major

Oct 1 daily spike low

109.45

Intermediate

Oct 19 daily spike high

108.88

Minor

2005 High

Level

Support

Details

107.34

Minor

5-day SMA

107.06

Intermediate

38.2 Fib of the 104.17-108.85 USD rally

106.51

Major

50.0 Fib of the 104.17-108.85 USD rally



GBP/USD – British pound traders were once again saw their defenses pummeled by the dollar longs with the pair tumbling toward the psychologically important 1.8000 figure. Following a greenback attack, cable longs managed to recover some of their losses and pushed the pair above the 1.8100 handle. As the price action begins to intensify, sterling bulls will most likely experience another skirmish with the greenback bulls, with dollar longs gunning for 1.8000 handle. A move toward the figure will most likely confirm trend exhaustion with the pair reversing dollar gains and aiming for 1.8500 figure. Indicators signal failing trend with ADX (DMI) falling to 38.69. The Stochastic on the daily chart is neutral at 39.65, giving the sterling longs plenty of room to maneuver. The dealer (4HR) chart Stochastic is oversold at 17.53. RSI is oversold at 27.25 on the daily chart and is neutral at 36.23 on the 4-hour chart. MACD remains below the zero line on the daily chart and is crossing below the zero line on the dealer (4HR) chart. In case the cable longs fail to make a further advance, dollar traders should expect the cable to tumble below the 1.8000 figure.

Key levels
Level

Resistance

Details

1.8359

Major

May 24 daily spike high

1.8245

Intermediate

20-day SMA

1.8199

Minor

5-day SMA

Level

Support

Details

1.8035

Minor

Sep 14 Daily spike high

1.7925

Intermediate

Oct 19 daily spike low

1.7842

Major

Oct 13 daily spike low



USD/CHFSwiss Franc lost more ground to the dollar traders as another key level fell to the advancing greenback bulls. A break above the 1.2700 figure is a beginning of the exhaustion move for the dollar longs following a 1400 pip gain the greenback made since the beginning of the year. A reversal will most likely see the pair test the bids around 1.2400 figure, with a break below test the support at 1.2200 handle. Indicators are signaling trending conditions with ADX (DMI) at 37.99. Stochastic on the daily chart is currently treading below the overbought line at 81.05. The Stochastic on the 4-hour chart is also overbought at 85.51. RSI is treading above the overbought line on both the daily chart at 81.05 and at 71.28 on the dealer (4HR) chart. MACD remains well above the zero line on the daily chart while it is pointing upward above the zero line on the 4-hour chart. In case the Swissie bulls are forced to retreat by the greenback longs, dollar traders should expect the pair to break above the 1.2800 and aim for 1.3000 figure.

Key levels

Level

Resistance

Details

1.2921

Major

May 20, 2004 daily spike high

1.2853

Intermediate

Aug 30 daily high

1.2790

Minor

Sep 8 daily spike high

Level

Support

Details

1.2595

Minor

June 9 daily spike high

1.2521

Intermediate

78.6 Fib of the Sep-Dec CHF rally

1.2446

Major

June 3 daily spike low



USD/CAD – Canadian dollar traders experienced a bout of unparalleled volatility as the pair tested the bids and offers on the both sides of the 1.2500 figure within 2 trading days. As price action remains volatile Loonie traders will most likely battle the US dollar longs over the control of the 1.2500 handle, with winning side dominating the price action in the pair. Indicators are signaling a broken trend with ADX (DMI) falling to 19.13, with DI- crossing above DI-, thus issuing a sell signal. The Stochastic on the daily chart is treading above the oversold line at 20.86. The 4-hour chart Stochastic is neutral at 47.9. RSI remains neutral at 51.18 on the daily chart with the dealer (4HR) chart RSI also neutral at 52.83. MACD is treading along the zero line on the daily chart and made a bearish crossover above the zero line on the (4HR) chart. In case the CAD traders fail to make a further advance, the price action than will once again favor the US dollar longs with the pair retreating above the 1.2600 toward the 1.3000 figure.

Key Levels

Level

Resistance

Details

1.2675

Major

May 20 daily high

1.2631

Intermediate

May 31 daily high

1.2556

Minor

May 30 daily spike high

Level

Support

Details

1.2447

Minor

38.2 Fib of the Mar-May greenback rally

1.2399

Intermediate

May 10 daily high

1.2356

Major

50.0 Fib of the Mar-May greenback rally



AUD/USD
– Australian dollar bulls remained defiant to the dollar longs as the Aussie traders kept the pair well bid above the .7600 figure. As the pair remain above the .7600 figure, a move to the upside will most likely going to be capped by the channel’s upper boundary at .7700 figure. Indicators are signaling a reversal in a trend with ADX (DMI) falling to 18.11, with DI+ crossing above the DI-, thus issuing a buy signal. The daily Stochastic is below the overbought line at 72.71 while the 4-hour Stochastic is neutral at 47.65. RSI is neutral on the daily chart at 46.73 and is also neutral on the (4HR) chart RSI at 52.6. MACD is sloping upward the zero line on the daily chart and has made a bearish crossover above the zero line on the 4-hour chart. In case the AUD dollar bulls fail to make a move against the USD dollar and are forced to retreat, a move to the downside will most likely see the pair test the .7400 figure.

Key Levels


Resistance

Details

.7732

Major

50.0 Fib of the .7889-.7474 USD rally

.7707

Intermediate

May 9 daily spike low

.7669

Minor

38.2 Fib of the .7889-.7474 USD rally

Level

Support

Details

. 7595

Minor

23.6 Fib of the Mar-May greenback rally

.7559

Intermediate

May 20 daily low

.7530

Major

June 3 daily spike low




NZD/USD – New Zealand dollar bulls maintained their stance above the .7050 level as the US dollar bulls hardly made a dent in the Kiwi’s defenses. As the price action continues to favor NZD longs, Kiwi traders should expect the pair to move back above the .7100 figure with sustained momentum seeing the pair touching the .7250. Indicators point to a slowing trend with ADX (DMI) falling to 21.8. The daily Stochastic is moving below the overbought level at 59.89 with 4-hour chart Stochastic rising above the oversold line at 22.04. RSI is neutral at 42.41 on the daily chart as well as on the dealer (4HR) chart at 44.95. MACD has made a bullish crossover below the zero line on the daily chart and is crossing below the zero line on the (4HR) chart. In case the NZD bulls fail to breach the .7200 figure and fall back, the next level they will most likely find some support will be .6950.

Key Levels


Resistance

Details

.7214

Major

61.8 Fib of the .7377-.6950 USD rally

.7163

Intermediate

50.0 Fib of the .7377-.6950 USD rally

.7113

Minor

38.2 Fib of the .7377-.6950 USD rally

Level

Support

Details

.7010

Minor

Apr  5 daily low

.6977

Intermediate

June 3 daily spike low

.6950

Major

June 1 daily spike low


Technical Levels London/New York


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13 June 2005 07:15 GMT