Dollar Weakens on Day of Greenspan's Final FOMC Meeting
Now that the dollar has climbed for 2 weeks into the 118.00 area, and has recovered just over 50% of its prior downmove from 121.40 to 113.40, today's downside reversal (reassertion of Yen strength) is conspicuous. In addition to the technical reversal action, it is also conspicuous that the dollar is weakening on day of Greenspan's final FOMC meeting- and the ... day that he turns over the Fed Chair to Ben Bernanke. Symbolic? Perhaps. Nontheless, can we blame the foreign exchange traders for selling dollars at the end of Greenspan's 18 year career? Of course not. Big Ben will have to EARN the respect of the markets. He will NOT be able to inherit it. Be that as it may, my work on dollar-yen argues that as long as 118.20 contains any further dollar strength, the dominant near term trend is UP for the yen, which should revisit critical support levels at 115.50/40 and at 113.40/30 in the upcoming days/weeks.
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