NEW YORK (TheStreet) -- Forex pairs have held against the U.S. dollar, and although heading sideways in early trade, will have a hard time losing heavy ground against the dollar since equities, oil, and gold are all being bought.
Asian equity markets have regained the knee-jerk losses that hit in reaction to the emergency rate hike by the Federal Open Market Committee last week, and in doing so have buoyed the long side of global risk. The ebbs and flows of regional trade will now kick in and push currency values around in-line with European and U.S. futures trade momentum.
If European market participants hold Germany's DAX above 5680, and U.S. trade holds 1095 on the S&P 500, the dollar index will find it tough to generate strong upside moves through 81.00. Oil holding at $78.50 a barrel and gold holding $1,115 an ounce will aid to the short side of the dollar trade and at worst aide the major currencies holding support against the dollar.
Euro:
The four-hour trend is short. Ten out of 12 weekly chart closes, and six weeks in a row of negative closes, have set euro/dollar up for a reversal bounce. The last two weeks have produced Doji (reversal) candles that are backed by an increasing daily trading range. A four-hour chart close above the Bollinger band center line at 1.3650 will signal a near-term breakout play that could test 1.3800. Daily Chart: ATR is 140 pips. RSI is oversold. SMA is resistance. Favor an oversold bounce.
