Coverage of all major currencies and the US Dollar Index.
The Dollar Index is testing primary support at 73.00. Penetration of the declining long-term trendline is only tentative at this stage and failure of support would warn of a down-swing to 70.00*. Announcement of QE3 by the Fed on Friday would cause a sharp fall, while absence of further easing would strengthen support.
* Target calculation: 73 – ( 76 – 73 ) = 70
The Australian Dollar is edging towards the upper trend channel against its Kiwi counterpart, but the primary trend remains downward. Respect of the upper channel (and resistance at $1.28) would signal a test of the lower border at the 2010 low of $1.21.
* Target calculation: 1.23 – ( 1.28 – 1.23 ) = 1.18
The Aussie Dollar recovered above the former primary support level at $1.04, testing resistance at $1.06. Breakout would indicate an advance to $1.10. But there are several question-marks over the latest advance. First, the rally has accompanied a similar recovery on the ASX 200 (to test resistance at 4500). If resistance holds, as expected, the AUD is likely to retreat.
* Target calculation: 1.04 – ( 1.10 – 1.04 ) = 0.98
Second, the CRB Commodities Index confirmed a primary down-trend with a sharp fall below 335. The primary trend is unlikely to reverse at this stage and another down-swing would drag the Aussie Dollar lower.
* Target calculation: 330 – ( 350 – 330 ) = 310
The Dollar Index has consolidated between 73 and 76.50 for the last 3 months. The recent failed swing, a rally that did not reach 76, indicates weakness and we are now likely to see a test of support at 73. In the long term, with 63-day Twiggs Momentum oscillating below zero, the primary down-trend is likely to continue. Failure of support would offer a target of 70*.
* Target calculation: 73 – ( 76 – 73 ) = 70
The Australian Dollar continues in a downward trend against its Kiwi counterpart. Recovery above $1.26 would test the upper channel at $1.28, but breakout below $1.23 is just as likely and would continue to test the lower channel border.
* Target calculation: 1.28 – ( 1.32 – 1.28 ) = 1.24
The Australian Dollar broke support at $1.04 against the greenback, signaling a correction to the long-term trendline. Support at parity has so far held and recovery above $1.045 would indicate another test of $1.10.
* Target calculation: 1.04 – ( 1.10 – 1.04 ) = 0.98
The Dollar Index has consolidated between 73 and 76.50 for several months. 63-day Momentum holding below zero indicates a strong down-trend. Breakout below 73.50 would warn of another decline, with a target of 70*. Recovery above 76.50 is unlikely, but would signal reversal to an up-trend.
* Target calculation: 73 – ( 76 – 73 ) = 70
The Aussie dollar displays a similar long tail to the ASX 200, indicating that buying support on the Australian stock market came from international, not local, buyers. Dolphin tells us that institutional buyers moved in when AUD fell below parity against the greenback.
