Temporary Technical Bottom
Written by A Forex View From Afar on Monday, August 18, 2008It looks like the market is trying to find a temporary bottom for the dollar strength seen in the last few weeks.
The daily chart for pound (Gbp/Usd) and aussie (Aud/Usd) look like the pairs are making a reversal pattern. The pound made a doji bar followed by a pin bar, while the aussie made two pin bars, not being able to break under a 7-months low in the 0.8600 area. In the same time, the euro (Eur/Usd) is struggling to make a lower low, but until now, the dollar seems unable to pull the valuation lower.
The Canadian dollar is unable to break for a few session above TheLFB R1 or under S1, reflecting the markets indecision for the pair’s outlook. What is important is that the pair made these moves on a volume significantly higher than the average.
It is not clear enough if the base set in the last trading days is temporary, only or is allowing the pairs to absorb some more valuations, or if the dollar’s strength has come to a standstill. It is certainly that the market needs a breath of fresh air after all the selling from this last month.
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