05 Sept 2012: Daily FX perspective by GFM Research

The Dollar Index after finding support at 81.00 ranges is currently trading at 81.49 resulting in long liquidation in most of the asset classes especially the benchmark equity index of the Dow Industrials and Nymex Crude. The short-term trend is still range bound between 81.00 and 82.10; only daily close below 81.00 would lead to further depreciation in the USD across the board. The benchmark equity index of the Dow Industrials (.DJIA) is currently trading at 13018 ranges with 13200-13300 still acting as critical resistance zone; on the lower side 12850-12900 ranges may act as important support.

Historic correlation between DX Vs DJIA suggests the short-term and medium-term trend being sideways where as the long-term trend is still dollar bearish till the Dollar Index is not closing above 84.50 on monthly basis.

On the event of the US Dollar appreciating, NYMEX Crude again slipped of $97.00+ ranges. Only daily close above $98.40 would open door towards $102.00.

EURUSD      Sideways-Down            1.2620              1.2550           1.2490           1.2450
USDJPY       Sideways                      78.80                78.50             78.10             77.90
GBPUSD      Sideways                      –                      1.5920           1.5840           1.5780
USDCHF      Sideways-Up                 0.9650              0.9610           0.9550           0.9500
EURJPY       Sideways                       99.20                98.70             97.80             97.50
AUDUSD      Sideways                     1.0310              1.0240           1.0180           1.0130

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