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Last updated 8-5-04

DX: Long DX decline is struggling to bottom. Bulls narrowly dominate but the July low must hold or a final retest of the Feb lows is most likely. Aug 6 selloff increases odds of final retest. Jun/J is bullish but bearish N/D lies ahead Bullish for at least a short term pop FALLING IN JULY RALLY! Makes the rally more suspect Falling, confirming the selloff from the May highs


Looking toppy, hugging support trendlines Nov/D often bullish for Euro Bearish Very high At a 6 mo. low
Boxed between the Apr low and the July high. Which way to breakout ? Bearish power readings say any upside breakout will be very limited.


Similar to EC, with slightly stronger pattern Ditto Very bearish OI FELL during July selloff (see DX) Falling from Apr/M price low, confirming uptrend


Very toppy after 3 year upside Selling off but near rally point Ditto Slightly supportive, may cap selloff ST Very low Confirms rally to July double top 
  Very toppy.
JY: Erratic but Apr high likely to hold Lower highs, lower lows. NA Slightly supportive, may cap selloff ST Rising into selloff, bearish. Unc

Official Japanese policy has supported a weaker Yen with massive intervention. April high seems likely to hold at this point.

AD: Toppy Further ST downside to break Jun low   Supportive of a rally, especially near any Jun low retest Low Rising, confirms the selloff from Feb highs

A short-term bounce is likely around the June lows. Thereafter, further downside is probable.

CD: Test of Jan highs is now likely Test of Jan highs ahead?   Bearish Flat Unc.

A marginal test of the Jan high is our best guess. Note, however, bearish power readings. We prefer the sidelines.

ME: Technical bottom is near In major bottoming pattern   Supportive Flat  
  The peso appears to be near a major bottom after long selloff from '02 highs. Note that the weak peso has been very good for the Mexican economy which has one of the lowest unemployment rates in the world thanks to exports fueled by the cheap ME. Also note the strong rallies in the Mexican stock markets.


Interest rates, fundamentals, policy, the economic cycle stage, global central bank preferences, and inflation all support a shift to a stronger dollar environment. But putting in the DX bottom has not been a smooth process. Given the 8-6 selloff we now narrowly favor our mid-July view of a mild retest of the Feb. dollar lows. This would certainly be the most tradable technical pattern.


TECH - LT: Long-term technical picture, usually based on weekly charts
TECH - ST: Short-term technical picture, usually based on daily charts
POWER: Interpretation of internal market power
OI: Open interest analysis
VOLAT: Volatility analysis
Unc: Unclear