Forex Investment and Currency Trading

This chart particularly concerned us when it closed above the 60.63% resistance (Peak in October 1998) level on 06 October this year.
This close completed a double bottom formation that had a target of above 100%.
On 10th October 2008 it traded to 103.40% putting it over 100% for only the 2nd time in its history. The other time had been 19th October 1987.
Of concern at the moment is the failure in this index to re-establish itself decisively back below 60%. Elevated levels above that point will continue to make the possibility of getting a rally increasingly difficult. We need a decisive [...]

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As a consequence it is worth looking at some important levels.

The double top formed with the break of 4,032 had a target of 2,900-3,000. The low so far is 2,929.
The 200-MONTH moving average comes in at 2,912. When the transports hit their low in March 2003 it came in at 1,905 and the low posted was 1,918.
The long-term trend line on the log chart off the 1987 and 2003 low comes in at 2,850.

While this range holds there remains the potential of a platform for a bounce. A move below this range would open up the danger of an extended [...]

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AUD/CAD has found stability around 0.80 after plunging 20% between July and October. Global equities followed a similar trend, suggesting that equities might have supplanted rate spreads as a key driver of AUD/CAD. Indeed, the correlation between equities and AUD/CAD has increased significantly through Oct 2008. However, this tighter correlation did not come at the expense of interest rate spreads but rather reflected a critical underlying concern that was driving both the equity sell-off and the narrowing AU-CA spread: fear of a protracted global recession. Not surprisingly, the correlation between AU-CA 2-yr spreads and the MSCI world equity index increased [...]

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There have been of the view for a number of weeks that the DJIA is trying to form a base off its 10 October low. It is time to revisit the picture and articulate how things look today. The reality is that on one side there are still some “glimmers of hope” while on the other side there are obvious reasons for concern.

Fear is without doubt one of the strongest emotions in financial markets. That was particularly evident in the sharp fall seen between August and October 2008. The chart above shows that fall overlaid on the sharp fall seen [...]

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