Tuesday’s Forex Levels
FX Comments for Tuesday
Dollar Index:
No signs of a slowdown in the dollar index as new highs were set overnight in what was an erratic start to the week based on the price action in London. The overnight gap at 89.20 was not quite filled, but still might be given our read on the intra-day charts. It appears that a wave 3 completion is nearing, with pull-backs as deep as 89.80-90.20 possible. Our upside price target, regardless of the depth of any pull-back will stand at 90.83 and 91.15. Ideally, we would prefer to establish trades on pull-backs only and not chase prices despite the relentless drive higher.
GBP/USD:
No signs of a short-term bottom yet despite very oversold levels. There is the potential to put in a bottom at 1.7482 (5/14/04 low) which might prove to be an excellent long entry if other technical indicators come into play too....stay tuned.
AUD/USD:
Neckline at .7490 gives way and now exposes .7290 in the medium-term. From a trading standpoint, AUD might find some minor support at .7420 (fib retracement off daily chart). A bounce from this level would make for good short-entries as .7455-80 looks set to contain moves much higher. Look for .7400 as the target over the next 6-12 hours.
NZD/USD:
Similar situation with NZD, while conditions are oversold and a potential support level at .6747 (8/20/04 high), we would expect upside action to be contained on rallies towards .6785-.6900. Price target over the next 6-12 hours is .6720
USD/NOK:
Upside resistance at 6.6691 might well contain the upward thrust for now and allow for better entries at 6.6400 and/or 6.6240-70. Bearish stochastic divergence on 60-min chart will bear watching and suggests that prices will likely move lower before any resumption of an uptrend.
As always, feel free to send me your comments and
questions.