Sorry about not posting an analysis yesterday.  My internet connection was failing to comply.  It turned out to be a rather melodious day with a move lower in the early session and a rally later in the day.

We seem to have definately settled in a range here.  The stock market and USD are highly correlated right now, so an aggresive move out of the range of either of them is likely to spur the other.

Lows yesterday were 1.4840 and a break below will find support at either 1.4820 or 1.4800.  A break below 1.4800, if it is legit, will find support at 1.4770, 1.4740-1.4730 then 1.4700.  If the break is not legit and just a stop run, it will likely tucker out by 1.4780-1.4770 and then reverse.  I say that only we because we all know there are a pile of stops sitting down there.

Keep in mind that since we know stop hunting is a common practise, whether intention or not, is a strategy in and of itself.  If there is a level that is likely to have many stops it, it seems create a gravitational pull and can result in a quick surge but often retraces.  Watch and see if you see this happening around critical levels.  If there is interest I can post an article on how to trade this phenominon.

Ok, but back to today.  On the upside we have very minor resistance at 1.4930 followed by 1.4960 and then 1.4990-1.5000.  On the last few runs at this level we have seem it tuckering out by 1.5015 or so.  If we can get above 1.5025 it is likely we will test former highs at 1.5045 and 1.5060.

Cory Mitchell, CMT
Chief Market Strategist
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