Tuesday, July 29th, 2008 - New York Update -5:15 PM EST Well traders, it didn't take too long for the 1.5600 EURUSD daily support level to give it up today. Either falling under its own weight or oil 2% lower today, the combination of the two likely sent EURUSD to new July lows - with only 2 days left in the month and NFP just ahead of us. How low can EURUSD go? I see room a bit lower, but exactly how far remains to be determined.
For tonight, I am going to use a retest of the back side of broken daily trendline support at 1.5590-1.5605 to get short with stops just above 1.5620. To my wave-surfers, you will see I have this labeled as wave iv, which means we have only wave v lower before a meaningful correction higher unfolds. So on a test of 1.5550 while short, I will trail the stops to cost and aggressively book a majority of profits on the move towards 1.5525.
Let me state this clearly. I do not believe this is the start of a move higher for USD. Crude oil held the 121.60 support level under immense dollar buying today, which qualifies under Elliott guidelines as a normal pullback in the course of larger uptrend. Similarly, gold is well above the same kind of support at $905-$910. With these levels intact, I cannot say with certainty that I am a dollar bull. Back tomorrow. TG.
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