Ok so the news was positive across the board for the dollar and yet the buck doesn’t move against any of the majors. Existing Home Sales rose 0.6%, Chicago PMI came out at 52.4, and Consumer Confidence came in at 109.0. All 3 reports came out better than expected and yet the dollar still failed to make any gains. I’m not sure why that is, and I’m not really going to try and guess. The market is always right and sometimes it just doesn’t do what we would expect it to do.
But what these news reports are telling us is that US economy is still hanging in there. The housing bottom that investors are looking for may be developing now since we’ve seen a rise in both new and existing home sales. We are also seeing good business activity as shown by the Chicago PMI and Consumer Confidence is also very high. So the numbers are telling us that there may still be some kick in the US economy and if history repeats itself, we may see a nice dollar rally in January. If you haven’t done so already, I recommend taking a look at Pip Diddy’s latest post in his Chart Art Blog. It explains all about the historical dollar movements at the end and beginning of each year.
Notice how the Euro is right in the middle of its 100 and 200 SMA on the 4hr chart. Stochastics is also hanging around in middle ground and it looks like we’ll have a range trading day tomorrow between 3100-3200. I don’t expect the pair to move out of that range due to the lack of reports out.
The Cable will probably end up heading towards 9750 but I don’t see it going any further than that. Stochastics is stuck in the middle and I think we’ll see a range bound movement in this pair from 9600-9750.
Unfortunately my entry was a little too high and it wasn’t triggered. It’s a shame too because the Swissy did end up dropping like I thought it would. I’m surprised the US reports didn’t push this pair higher. Stochastics on both the 4hr and daily chart are headed down so my guess would be that this pair will move down around to 2100 and will probably range from 2100-2170. I’m simply looking at the moving averages at this point and using them as my support and resistance levels.
I’m about ready to give up on the Yen because it obviously does not want to move down. I am going to keep saying what I’ve been saying for almost 2 weeks now….this pair is going to fall. Right now, the likely target is 118.40 (the 50 SMA on the 4hr chart).
I will not be posting tomorrow since there aren’t any major fundamental reports out. The markets should follow the technicals because of this so pay close attention to support and resistance lines as they will play big parts in tomorrows trading. Have a great new years everyone!