Dollar, Yen Likely To Run Into Technical Resistance

Gary Tanashian submits: Perhaps my book is shading conclusions here but both the USD & Yen appear to be getting to a stage where they will hit short term tops at the least. These have been the two most despised currencies for years now and have been major drivers in the debt & liquidity confidence game that is now threatened.

This week the Fed is thus far playing chicken with the market; a market whose temperament looks a lot like Cramer's now famous wig out. Each currency can blow off higher here given the emotionalism and need for claims on 'cash', but neither has either of these currencies proven anything substantial technically. We should remember that it will be easier for the Fed to don its hero's cape with the dollar as far above the critical 78-80 range as possible. The dollar is the Fed's product after all.

Caveat: in a debt leveraged global market where first Fed policy and then all manner of Ponzied up speculation ('innovative' mortgage products, levered hedge funds, 'private' [ie borrowed] equity, etc.) have ruled for years, will the unwinding and rush for 'cash' simply end quietly? Unlikely.

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Comments

[robert99:]

What I need is for both of these bastard currencies to drop so my gold stocks and Nintendo can begin heading north again. I'm split as to whether they actually will or not, but I have my fingers crossed...

2007 Aug 15 11:21 AM

[crowdofchee...:]

USD is up sharply right now, even after the Fed Reserve printed massive amounts to put into the stock market. In fact the USD rose practically in tandem to the injections. This is against all intuition/common sense. You would expect the USD to fall after so many more were issued. Money and associated behavior/patterns dont seem real sometimes

2007 Aug 15 02:06 PM