The dollar tests psychological resistance
With another quite economic morning, this Wednesday morning, most eyes and ears will be on the Fed President Lacker and the FOMC minutes release at 1:30pm and 2:00pm EST, respectively.
That certainly doesn’t mean I am taking my eyes off the charts and the battle at 87.00 on the U.S. Dollar Cash Index has begun. Reminds of the UFC fights I was watching last night…neither the bulls nor the bears are going to give up easy. Prices have been rejected at the 87.09 level and are finding support at 86.89. This is classic psychological number reaction and similar to what was happening at 86.00 from 10/5 to 10/6.
The end of day chart shows the story with a little less detail but all action! It also points out that resistance is waiting overhead even if prices are able to break above the 87.00 level. The near term high is 87.33 and since the Dollar’s drop the May, prices have not fared well in any attempt to make 87.00 support.
Any further drop in the EUR/USD and GBP/USD hinges on the 87.00 battle in the U.S. Dollar and the Euro and Pound shorts will certainly scale back if the 87.00-87.33 area proves to be where the bears take hold of the greenback.
As I am also a avid futures traders, I thought I would include a chart of crude this morning; not only is it great for getting a feel of the USD/CAD but crude’s been a great mover. This weekly chart shows that prices are at a huge decision level and the 57.70 – 57.30 area could possible be where crude either decides to heads markedly lower or rally…right from this very area we are watching.
*All charts are done on eSignal Premium with the EZ2 Trade Software Collection. www.ez2tradesoftware.com
Raghee Horner is an trader with more than 15 years’ experience in the markets. Ms. Horner has taught her brand of technical analysis and charting strategies to students all over the world. She is also the author of the bestselling “Forex Trading for Maximum Profit” and “Thirty Days of Forex Trading”. Emphasizing charting and price action and continues to teach the tools and strategies that encourage self-directed traders to pursue the study of chart analysis and market psychology. She is a much sought after public speaker who has conducted seminars in the US, Canada, the Caribbean, and Asia. For more information on Raghee’s analysis and trading email cs@raghee.com or visit www.raghee.com.