U.S. Dollar Barely Holding onto Gains

James Hyerczyk from ForexHound.com at 11/27/09

 

The U.S. Dollar gave back over 50% of its early morning gains as investors took profits after a strong two-day rise. The inability to break equity markets lower after the opening helped drive up demand for higher risk assets. Investors began selling the Dollar after it became clear that there would be no panic selling of higher risk assets.

The EUR USD is trading lower but is well off its low at 1.4828. The main range is 1.4625 to 1.5144. Today’s low stopped at the .618 retracement level of this range at 1.4823. A close under 1.4860 will form a weekly closing price reversal top.

The GBP USD fell sharply this morning after it was reported that U.K. banks have exposure to Middle-Eastern debt. The British Pound is finding support at a 50% price level at 1.6293. Additional support is coming from two main bottoms at 1.6261 and 1.6250.

The USD JPY plunged this morning to a new low for the year at 84.83. Since then this market has surged to the upside as equity markets failed to follow-through to the downside. The daily chart is now in a position to post a reversal bottom after a close over 86.57.

The strong recovery in equity and crude oil prices is helping to boost the Canadian Dollar. The main trend in the USD CAD turned up overnight, but the lack of follow-through to the upside indicates it was most likely short-covering rather than new buying.

The AUD USD turned the main trend down after the hard sell-off overnight. The inability to break the U.S. equity markets is currently triggering a huge short-covering rally in the Aussie.

The NZD USD is under pressure this morning but currently experiencing an intraday short-covering rally. Look for lower markets if the Dubai situation begins to worsen. A close over .7151 will form a daily closing price reversal bottom.