The dollar failed to hold on to gains versus the European currencies and closed flat versus the euro, franc, plus the yen, and lower against the pound. The early strength of the US currency followed signs that the credit crisis is finally starting to impact the Eurozone. Regional retail sales fell and a German bank needs $9.4 billion to cover mounting losses. But the sliding US services ISM and the upcoming release of the non-farm payrolls weakened the dollar later in the day. The dollar downtrend remains in place.

Euro/dollar

Euro/dollar reversed early losses again to close flat on Thursday. My model remains short, but I prefer to be square. I expect a move higher.


Initial resistance now comes at 1.5745. Then, there is resistance at 1.5770. Distant resistance now comes at 1.5904 from a pivot high.

Immediate support is now seen at 1.5605. This is followed by 1.5565 and 1.5535. Below 1.5480, there is distant support is now seen at 1.5350.

Oscillators are mixed.

NEAR-TERM: Slightly bullish
MEDIUM-TERM: Mixed
LONG-TERM: Bullish

Dollar/yen

Dollar/yen consolidated on Thursday after surging for two days. My model remains long. Once again, hold long positions VERY carefully because the upside seems to be in its final stages. The key level is 102.30 from another 50-point pivot, which targets 101.80 and 102.80.

Immediate resistance is at 102.80. Above 103.40 there is resistance at 104.10.

Initial support is seen at 101.80. The next level is 101.15. This is followed by 100.25 from a 50-point Gann pivot, which targets 99.75 and 100.75. 101.25.

Oscillators are rising.

NEAR-TERM: Mixed with downside risk
MEDIUM-TERM: Mixed to slightly bullish
LONG-TERM: Bearish

Sterling/dollar

Sterling/dollar reversed early losses on Thursday to rally after forming a bullish reversal a day earlier. Model went long. I expect a rally.

Initial resistance now comes at 1.9995. A break above 2.0060 would signal a further upmove to the peak at 2.0190.

Immediate support is seen at 1.9875. The next level is 1.9805. Below 1.9730, there is distant support at 1.9620.

Oscillators are mixed.

NEAR-TERM: Mixed with upside bias
MEDIUM-TERM: Mixed with upside bias
LONG-TERM: Mixed

Dollar/Swiss franc

Dollar/Swiss reversed gains to close flat on Thursday. The medium-term outlook remains bearish.

Immediate support is still seen at 1.0060. This is followed by 0.9950. Below 0.9880, distant support is now pegged at 0.9775.

Initial resistance is still seen at 1.0155. The next level is 1.0200. Further resistance is at 1.0250. Distant resistance is at 1.0390

Oscillators are rising.

NEAR-TERM: Mixed
MEDIUM-TERM: Mixed
LONG-TERM: Bearish


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