Finotec News Archive - May 06 2008
Technically US Dollar may lose strength against Japanese Yen!
The dollar extended losses on Monday, falling to session lows against the euro and yen, as investors debated the strength of the U.S. economy amid high oil prices.
Anthony Boyajian 
06 May 2008
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The dollar extended losses on Monday, falling to session lows against the euro and yen, as investors debated the strength of the U.S. economy amid high oil prices.
The U.S. dollar was broadly weaker on Tuesday as doubts resurfaced about the health of the U.S. economy while record oil prices lifted commodity currencies such as the Australian and Canadian dollars.
Trade was again thin with Tokyo off on holiday for a second day, keeping the dollar subdued around 104.72 yen after failing to sustain a 105.62 high on Monday.
"The dollar is coming under renewed pressure as global risk appetite appears to be stabilizing," said Callum Henderson, head of currency strategy at Standard Chartered Bank. "Investors have a lot of cash and are starting to reinvest, refocusing on nominal interest rate spreads and going for carry."
The following technical analysis gives us a detailed lookout on what is expected to happen to USD/JPY.
The buying point is at 105.70; based on a break of a strong resistance.
- Previous resistance is the take profit at 108.05
- Fibonacci 38.2% is the stop loss at 104.75
The selling point is at 105.01; based on a failure swing formation.
- Fibonacci 61.8% is the take profit at 104.35
- Previous resistance is the stop loss at 105.60
To strengthen our analysis; we use many other indicators, starting with MACD (Moving Averages convergence divergence); we notice the crossing of MACD to the signal line and is pointing downwards. In order to find the power of the market, we use RSI (Relative Strength Index).With RSI; we can determine that the market is in a bearish direction.
The momentum oscillator is very important to understand the strength of the market and as we see on the graph is moving downwards. The ROC shows us a clear down movement and the stochastic oscillator breaks 80% line and continues to go lower.
* The following analysis is for information only; Finotec is not responsible for any decisions or misinterpretations based on the given text.
By Finotec’s professional analyst,
Tony B.
dealingdesk@finotec.com
USD/JPY Hourly Chart
Finotec Analysis Team
06 May 2008
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