Market traded as high as 1.3234 but reversed most of its gains down to 1.3138 low this morning. Dollar – continues - to defy bad numbers and while the short-term trend is definitely bearish intraday charts point to a momentary base. Initial resistance continues to hold at 1.3336 in the short term and could extend to 1.3715 if broken. In the nearer term 1.3081 (November 25 high) and 1.3000 remain clear targets – choppy decline continues.


The Early week decline from 1.5348 to 1.4471 gives points to strong support at the 1.4470 level as the pair continues to range between 1.4475 and 1.4830. On the downside, strong support can be found in the 1.4370 – 1.4390 area as this level was tested three times near the end of 2008 and beginning 2009 – mentioned Tuesday as 1.4376 - Dec 31st low. Sentiment remains mixed to negative but renewed strength may open the way to 1.4678 and 1.4800 – with an eye on 1.5374 January 8th high – Wedge formation on graph shows a consolidation of the recent move, while we heed caution to long term bulls on cable, the RSI indicates a short term buy as we continue to channel down.


With the dollar expected to remain heavy against the Yen on continued risk aversion – the move that started last week that saw the Yen rally from 94.64 – 88.78, with 88.78 being tested several times before a retracement to 89.95. Initial resistance holds at 90.00 (previous support) then 91.71 (50% retracement on Yen rally) with 94.59 (Jan 6th high) still on the radar. Strong support holds at 88.78 level, further down 87.13 (Dec 17th Low) and continued strong downtrend may open way to 79.70 April 1995 low – any continued price action under 88.00 could see further BoJ intervention later in the year.


Market traded as high as 1.1243 on Wednesday as the dollar extends gains and recovers Jan 8th low of 1.0865. Uptrend resistance stands at 1.1250 then 1.1282 - former support and possible trend up to 1.2298, 21st November high. Initial support at 1.1123 (low of current 1 week range) then 1.1088 then 1.0863 (level tested 3 times between Jan 7th and 9th) Renewed weakness may break down 1.0735 and return toward 1.0500 and 1.0375.