(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; chart pattern in yellow; 200-period simple moving average in light blue.) 8/19/2008 – USD/CAD – As shown on the accompanying USD/CAD 4-Hour chart, price action on this pair has formed both a steep uptrend support line (represented in green) and a flag pattern (represented in yellow) since the forceful bullish run in the dollar began several weeks ago. The combination of these

When does the weak dollar negatively affect foreign investment in the United States? Looking at the recent record of the Treasury International Capital System from the Department of the Treasury, (TICS, June report, Friday 9:00 ET) it would seem to be never. Since July 2007 the three months with the highest totals of private investment in the United States have been months that the dollar fell, often dramatically, against the euro. In October 2007, foreigners purchased $96.2 billions in US

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; chart patterns in yellow; 200-period simple moving average in light blue.) 8/18/2008 – GBP/JPY – Monday’s price action on most currency pairs has been slow-moving and marked by sideways consolidation. GBP/JPY, a daily chart of which is shown, has been no different. After the severe drop that occurred last week, this pair has corrected somewhat and consolidated into what

The euro has fallen 8.6% in value against the dollar in month, 4.3% in seven trading days. Currency markets are highly speculative and are not usually spoken of as having bubbles. But what else should we call a market that adjusts at this speed? The fundamental market view since the credit crisis blew up last August was that the United States economy would be punished by the combined housing, credit and financial crises. This view was responsible for the year long ascent of the euro against

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; horizontal support/resistance line in yellow; 200-period simple moving average in light blue.) 8/15/2008 – EUR/USD – Although most technical signals on the EUR/USD daily chart, as shown, are indicating extremely exhausted and oversold conditions, downward momentum currently appears almost unstoppable. Logically, there should be a potential impending correction to the drastic

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; downtrend line in red; 50-period simple moving average in light blue.) 8/14/2008 – EUR/CHF – Price action on the EUR/CHF daily chart, as shown, has pulled back to the significant downtrend line above which it broke out late last month. This downtrend line is represented on the chart by the long red line, which price touched as resistance at least five times before breakout.

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend lines in green; horizontal support/resistance line in yellow; 200-period simple moving average in light blue.) 8/13/2008 – GBP/USD – The deep and rapid plunge in price within the last two weeks on GBP/USD (a daily chart of which is shown), has brought the pair all the way down to the key long-term uptrend support line. This line (represented on the chart by the longest green line) has

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; uptrend line in green; downtrend lines in red; horizontal support/resistance lines in yellow; 50-period simple moving average in light blue.) 8/12/2008 – USD/JPY – With recent dollar-strengthening, price on the USD/JPY daily chart, as shown, has reached up to approach resistance at the uptrend line (in green) that has defined price action since mid-March. This line originally served as support

(Chart courtesy of FX Solutions’ FX AccuCharts. Price on 1st pane, Slow Stochastics on 2nd pane; downtrend line in red; 200-period simple moving average in light blue.) 8/11/2008 – EUR/JPY – Price action on the key EUR/JPY cross (a daily chart of which is shown), has performed a throwback to the downtrend line (represented by the long red line) that it broke in early June. This line was originally an exceptionally strong resistance level with at least six solid touches before breakout, and

When economic fundamentals, central bank rate policy, and technical analysis align the currency market can experience the rare tsunami that struck the euro this past week. From Monday to Friday the euro lost 4.0% against the US dollar, 2.5% against the yen, and 1.7% against the British Pound. Almost all the losses against the dollar and the pound, (3.3% and 1.5%) and the entire decline versus the yen, occurred after Jean Claude Trichet the President of the European Central Bank (ECB) reordered