Dollar 'Gives-Back' Gain on Late Equity Bounce.
Monday, July 06, 2009
by Bob Kozak of C3I Capital Management, LLC
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Dollar Index (DXU9): The Dollar opened higher at 81.05 as an increase in risk-aversion sent traders to the safe-haven of Treasuries and the Dollar Index. Concerns that the global recovery will falter as unemployment increases and consumer spending tightens sent global markets tumbling over-night. A smaller than expected bounce in the ISM non-mfg. index turned equities higher and sending the DX lower through to the close of 80.69, up 2 tics. The s/t trend remains 'positive' w/ neutal momentum indicators. This weeks G-8 meeting in Italy could see pressure from Russia and India to address the 'global ' currency reserve situation, i.e. Dollar. Longs should tighten 'stops' or buy 'puts' to reduces exposure. A lower open may find Support at 80.42 and 80.16, while an open above 80.79 should find Resistance at 81.05 and 81.42. British Pound (BPU9): Sterling opened lower at 1.6141 after the BoE announced that it may increase its program of asset purchases by $40B to help the faltering economy. As equity markets recovered, pressuring the DX, sterling rose to a day-session Hi of 1.6269, before drifting to a day-session close of 1.6249, down 171 tics. The s/t trend remains 'negative' w/ neutral momentum indicators. Traders will key on equtiy markets 'over-seas' to test the late day recovery and see if we see an increase in risk-appetite or revert to risk-avoidance. A higher open should find Resistance at 1.6466 and 1.6512, while an open below 1.6383 may find Support at 1.6337 and 1.6254.
Recent articles from this author
- Dollar 'Pauses' Ahead of FOMC Results. - Tuesday, August 11, 2009
- Cable Breaks Out on PMI Report, DX Drop. - Monday, August 03, 2009
- Sterling 'Shines' As Housing & Stocks Prices Increase. - Thursday, July 30, 2009
- Chinese Equity Correction Sparks Flight to Quality in DX. - Wednesday, July 29, 2009
- Canadian Sets New High for 2009. - Monday, July 27, 2009
About the author
Bob Kozak, Currency Futures Analyst
C3I Capital Management, LLC Bob Kozak is the Senior Currency Futures Analyst and Managing Principal at C3I Capital Management, LLC. He has been involved in the financial markets since 1978, when he was recruited as portfolio strategist for a major Wall Street firm. With a degree in Mathematics from the University of Massachusetts, he was drawn towards technical analysis. He moved into the retail sector as a Certified Financial Planner, assisting clients in structuring an investment portfolio suitable for their particular needs, emphasizing income and risk management. A unique opportunity to mentor under a former Chairman of the Chicago Board of Trade enticed Bob into the commodities arena. Bob eventually managed the office of his mentor, before the firm was purchased and relocated to Chicago. Bob follows most futures markets using primarily Technical Analysis, and takes advantage of the strong correlation between the U.S. Dollar Index and those futures purchased in Dollars. You can request a FREE 2-week trial subscription of PROBABLE DAILY & WEEKLY TRADING RANGES by calling Bob at (561) 674-0014 or email at bkozak@C3ICapital.com Bob has been a frequent contributor to many national publications, including Futures Magazine, Dow Jones Newswire, and Bloomberg FX -TV.
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