JPY

9344 usdyen Ashraf do you see further upside to 9750?

By Stephen Cox, CMT
A DOW JONES NEWSWIRES COLUMN

NEW YORK (Dow Jones)--The Dollar Index has risen fast this week and its upward trajectory has been nearly vertical. In fact, although it's not evident that the uptrend is exhausted, an interim top is about to form, I believe. See chart at
http://www.dowjoneswebservices.com/chart/view/3934

It's notable that Friday's trading so far is confined in Thursday's 83.924-85.268 range. That's an obvious signal of fading upside momentum, and the virtue of heeding such homely details is the fact that you don't need a whiz-bang mathematically overcomplicated technical oscillator to tell you the obvious: The bull is about to take a break.

That conclusion is reinforced by the fact that an interim top may be lurking in the 85.584-85.659 resistance band. And I remember the first technical lesson that stuck in my brain, lo, these many years ago: Slowing momentum and looming resistance is a recipe for a selloff.

The final point of the chart is the fact that the Dollar Index would have to make a precipitous drop in order to kill the bull outright. Uptrend channel support, as I've alluded to this week, is a good way below the current market. Friday's support is 81.685, and that wide a drop would be a profit breaker even if it didn't hurt the uptrend.

For now stop trades at 82.820, or at 81.163.


Look For Relative Euro Rally

The prospect of a Dollar Index correction, of course, suggests a corresponding correction of the euro's ongoing downtrend against the dollar. The euro's downtrend low, recorded Thursday, is $1.2521. A minimum correction would, I believe take the euro back to the $1.2710-$1.2742 resistance band. That move would probably only delay an eventual test of target support at $1.2342.


(Stephen Cox, a chartered market technician, is chief technician for Dow Jones Newswires. He can be reached at 212-416-2212 or by email at stephen.cox@dowjones.com.)

(Data by CQG)


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(END) Dow Jones Newswires

May 07, 2010 11:32 ET (15:32 GMT)

Ashraf,

actually I got in before the numbers, so I liked usd/jpy as well. For some reason I could not "imagine" disappointing job # from US. Usually when expectations are one sided I got in the market 10-15min before, and then get out right before release, but today I decided to "ride the bull". Bull was good to me:)


b.

@Ashraf are the good calls only on your paid webinar now??

Really excited how things turned out as per my previous posting a bit unlucky myself as far as practical implementation is concerned. I was very sure about audjpy and usdjpy but in the last days when we touched 95 and 88 i turned against my own judgement . now i am pretty sure i will get it right next time i am long audjpy with a position being initiated at 80 79 78 77. took the profits and now will try to do it again.