The Dollar Wakes Up for ’07
Could it be that the Dollar was simply waiting for ’07 to begin partying?
Who knows. As a trader the only thing that keeps me out of business is a flat market so this breakout from the sideways action is welcome. Heck, a breakdown would’ve been just as welcome; it’s the movement we’re after.
Notice that on this daily chart of the U.S. Dollar Index that the break above the 84.22 high was taken out this morning and the current high is 84.33. What is most significant about this high is that the Dollar is above the “00” psychological 84.00 level. However, this is not enough to assume support at the “00” just yet because notice that prices have not had a problem piercing 84.00, just staying above 84.00. 84.00 has been pierced 5 times since December 15th. So this is a fresh attempt at 84.00 with good “New Year’s” volume rather than holiday volume. The move is much more evident on the shorter intraday timeframes, like the 30 minute chart.
As long as prices are on the strong side of the Wave, there will be good support; ideally the Wave will be heading upwards in a 12 to 2 clock angle. I have also marked the minor and major psychological numbers on this chart. Currently prices are respecting the “20” tick level. There is certainly enough swirling around in the fundamentals this morning to merit a test of the “50” level to the north or the “00” level which is now support with the ISM Non-Manufacturing Index and ofcourse tomorrow big Non-Farm Payrolls release. As long as prices can establish support above 84.00 and the Wave I will assume that a test of “50” is not far away. There will be resistance at 84.50 and 61.8% Fibonacci (look at my daily chart) at 84.41. By the way, I will be posting a video later this afternoon at raghee.com talking about the London breakouts we’ve been seeing this week so be sure that check that out.
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.