Highlights
- US Dollar On Its Heels - FOMC Announcement Ahead
- US Dollar Support 82.00, EURUSD Resistance 1.3750
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| Monday, December 15, 2008 - New York Close - 5:30 PM EST
Here is a look at the EURUSD resistance zone. This chart depicts
a pending completion of wave IV into the 1.3750-70 sell zone. This
is an alternate count compared to the count shown this morning on
the US Dollar index, but is still a valid count and remains in the
running. As you can tell, I have been treading extremely lightly in
this low-volume, moderately confused market. Suddenly we are selling
dollars based on what I believe to be false premises. First is a
widened Euro/US interest rate differentials after tomorrow's FOMC,
and second as the Fed injects massive amounts of liquidity is the
long-run outlook for higher inflation. First, this market is not
trading interest rate differentials, we're trading growth
differentials, which are equally poor, so I don't know what everyone
is getting so excited about here. Secondly, in a deflationary
environment increasingly valuable bond yields and cold hard (US
)cash will continue to be king. So I'm sticking to my game plans of
selling EURUSD. I am looking to be short a half unit of EURUSD at
1.3760 with 1.3810 stops with open targets for tonight. Back
tomorrow for the 2:15 PM EST FOMC announcement. TG. |
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| Monday, December 15, 2008 - New York Update - 12:15 PM EST
The dollar is on its heels again this morning as we are 24 hours
from a potentially historic Federal Reserve meeting. Futures markets
are pricing in a 70% chance the Fed will drop the 1% overnight
lending rate a full 75 bps to a new low of 0.25%. The remaining 30%
of futures bets place the cut at a 50% swipe. The dollar should
continue to trade with on the soft side until we have more
information from the Fed.
Technically speaking, the US dollar index is quickly approaching
significant (B)-wave support at the 81.50- 2.00 zone heading into
tomorrow's 2:15 PM EST Fed announcement. Should the US dollar bottom
into this Fib and Elliott Wave support zone, I will be looking to go
long dollars, short euros leading into tomorrow's announcement.
Speaking in terms of EURUSD, the 38.2% retracement of the entire
1.6038-1.2331move lies just above us at around 1.3750 as we trade
1.3655. Will be back tonight. TG. |
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