Democratic Underground - daily dollar watch

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Last trade 87.99 Change -.61 (-0.69%)

Dollar Retreats As Emotions Run Wild

http://www.dailyfx.com/index.php?option=com_content&task=view&id=3616&Itemid=39

Dollar hastily retreated as emotionally charged market made a quick work of the greenback bids with the majors retaking the levels lost during the previous few trading sessions.

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EUR/USD – Euro bulls came out in full force and retaliated against the dollar longs as they pushed the pair above the 1.2200 figure during the latest bout of anti-dollar bearishness. As the price action temporally switches sides, a failure to gain momentum above the 1.2200 handle will most likely see the euro retrace the initial move and break below the 1.2100 figure, which provided temporary support for the single currency longs. A break below the 1.2100 level will most likely see the dollar rally resuming its course and target the bids around the 1.2041, a euro defensive position established by July 7 daily high. A sustained momentum on the part of the dollar bulls will most likely see the vanguard greenback forces attack the psychologically important 1.2000 handle, with a break below taking on the euro bids around 1.1982, a level marked by the July 26 daily low. Indicators are favoring the dollar bulls with both momentum indicator and MACD below the zero line, while extremely oversold Stochastic gives the euro bulls a fighting chance.

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USD/JPY –
Japanese Yen longs once again tried to retake the territory lost to the dollar bulls during the last few trading session as they pushed the pair toward the 111.50 mark, which is being defended by the 23.6 Fib of the 104.18-113.74 USD rally. A failure to break to the downside will most likely see the Japanese Yen bulls once again feel the wrath of the greenback longs with the pair retreating above the 112.00 handle. A sustained momentum on the part of the dollar bulls will most likely see the pair take-on the yen defenses around 112.62. a level marked by the August 8 daily spike high. A break above the 112.62 will most likely open the 112.98, a July 19 daily high as a potential target which currently acts as a gateway toward the 2005 high at 113.68. Indicators are beginning to diverge, with momentum indicator above the zero line and MACD sloping upward toward the zero line, while overbought Stochastic give Japanese yen longs a chance to retaliate.

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I would assume that those emotions are tied to this:

HURRICANE RITA ACHIEVES CATEGORY 4 STATUS

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