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Dollar, USD Gains Stalled
By Benny Nardino | September 23, 2008
The dollar has been under immerse pressure for the past weeks due to series of bad news from the US economy. Last week saw the dollar make another 4-month low of 103.52 on the yen having risen to the podium of 110.65. Since making that 13-year low of 95.73 in March 2008 it has been dugged by events. See chart.
forex-usdjpy-surge-stalls
The US Government injection of cash (some $700 billion) into the mortgage market last week sparked a significant rise in the last few days of trading sessions. This has since eroded again by another strings of bad news.
As the chart indicates, the pair is trading at critical points where it could go either way. The market violated the 62% level on the Asian session. Although it has since traded to the 50% mark, but the pattern thus created reinforces the classic signal of head-and-shoulders.
Earlier trades indicate upside leverage as the pair continues to make higher-high on the 240 mins-timeframe. But the trade still remain within the Support-Resistance range of 105.20 and 106.28. A range which is still very susceptible to either way.
Unless there is a break above the 38% level which 106.30 or a breakdown below 105.10 this pair remain high risk by present economic outlook. Trade it with caution.
Have a great day of trading.
Tags: dollar, gold, head and shoulders, high risk, investment, pattern, Trade, US, USD
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