Currency Pair Overview: Negative Equities Help The Dollar Index Overall, the dollar index took advantage of the negative equity markets initially took around the world in Thursday morning trade, and managed to advance a few points ahead of the U.S. open. Most of the dollar’s gains came during the European session, after relatively flat Asian currency trade. The macroeconomic calendar was light on Thursday, with the European calendar being clear of any red-flag reports, while the upcoming U.S. sessions holds the U.S. unemployment claims, and Oil Inventory report. Dollar Index Technical View: TheLFB Member Charts 4 Hour Chart: Short. Main price points: 74.95, 75.60, and 76.82. Looking for: Wave iv pull-back The dollar index made a small turning point recently after a few tests of the 75.00 area over the past few days. For now, we are still looking for a move lower into the 74.00 support zone, where red blue wave V), sub-wave of a larger wave V may hit the bottom. Currently, the dollar index is showing signs of a long corrective bounce higher in black wave iv from where traders may look for final wave v. The 75.60 support zone must hold, otherwise the wave count will have to be re-worked. The euro (Eur/Usd 1.4950) plunged 80 pips during the European session, and is now trading just above TheLFB R1 (1.4940). A break below this price point will send the pair straight into the 20-day moving average, which is patiently waiting in the 1.4885 area. During the European session, a report showed that European Industrial Production advanced 0.3%, less than expected. TheLFB Trade Plan of the Day is one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, as well as S&P futures, oil, gold, and the dollar index. The pound (Gbp/Usd 1.6550) had a daily range of 90 pips during the overnight session, but still, the pair failed to pull any important moves. Earlier in the session, the pound tested the 1.6530 area, where it bounced off a trend-line that has held the market since Oct 13 09. A break below this trend-line, coupled with the negative momentum seen lately has the potential to send the pound much lower. The aussie (Aud/Usd 0.9305) received a strong boost during the Asian session, when reports on the Australian labor market hit the newswires with a better than expected read. This provides the market further clues that the RBA is likely to continue hiking rates, as the Australian economy looks in very good shape when compared to the major pair economies. The cad (Usd/Cad 1.0475) is currently trading in the 1.0475 area, which had been an important intra-day swing point lately. The cad’s declines come after three days in which the pair had been moving almost exclusively lower, losing approximately 300 pips. The swissy (Usd/Chf 1.0105) mirrored the moves made by the euro during the overnight session, something that happens most of the time. Since the day started, the swissy gained 50 pips, and is currently preparing to break above the range of the last few trading sessions. Over the last two days of trading, the swissy formed two consecutive (indecisive) doji-stars. The yen (Usd/Jpy 89.75) saw a range of only 30 pips since the session started, as the pair moved without any real trading volume or momentum. Lately, the Japanese bond market has been affected by deflation and credit risk threats, but this had little influence on the value of the Japanese yen.

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