Best Financial Markets Analysis Article An earlier failed attempt to embark on a recovery phase, thwarted by a 23.6% resistance area, has seen the Dollar Index slipping lower. However, it could be that this is a final downleg…

The FX Trader’s view

MONTHLY CHART:

The main sign in 2008 that long term bears were losing momentum was the breach of the bear channel top projection.

Subsequent resistance was found from the 38.2% recovery level.

Current weakness has tested/eroded the 61.8% pullback level and Dec-08 low (77.688) – how much lower this can go is unclear.

See Daily chart…

DAILY CHART:

In the Guide we had been on the alert for further s/term bear pressure, and the recent breaks of the small channel base and 78.334 02-Jun low have confirmed the bears in control for now.

At this stage we note a Fibo projection at 76.40, ahead of the 75.17 76.4% level on the long term chart.

Characteristic of some other markets too (e.g. EUR/USD), note that a third and possible final impulsive leg (down in this case) is unfolding. We think it is right to be cautious about how long this trend lasts.

Philip Allwright
Mark Sturdy

Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

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Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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