By Eric Hadik
Insiide Track
The Dollar has continued lower and is approaching important support around 75.40 - 76.05/DX. While it is still possible that the month of October will represent the lowest monthly close in the Dollar (and possibly the lowest low if it reverses higher after a Fed rate cut, realizing that this might be the final bit of bad news for the Dollar), there is the possibility that some further, blow-off selling could be seen. This is typical at major turning points.
The Dollar could set a 6-12 month low at this time and then rally into June/July 2008.
The Euro is finally approaching its 1995, continuous contract peak of 1.4549. This level should be considered the ideal, upside objective and the most important resistance on a 3-6 month basis. The Euro is likely to turn down just below this resistance or give a temporary spike through it (and see if more buyers will enter an already-frothy uptrend). In either case, a reversal lower is expected before the end of November.
The Yen remains bullish and could see a continued advance - on balance - into year-end. It pulled back to intermediate support and set the stage for a second advance into early-December. Ironically, daily cycles are aligning around December 7th (Pearl Harbor Day) for a peak in the Yen.
The Canadian Dollar remains in a major bull market that could carry it higher into October 2008, when a myriad of longer-term cycles converge. These include the 17-Year Cycle, a 7-year cycle, a 40-41 month cycle and a 21-22 month cycle... all aligning in 4Q 2008. The 'Loonie' is as much of a petro-currency (at least recently) and could be the impetus behind a North American economic union. Could one of George W. Bush's parting actions be the acceleration of a Canadian/US/Mexican currency 'treaty'?
The British Pound did see another multi-week decline in October but that only amounted to a 2-week drop, dramatically less than what was expected. For 3 weeks, it consolidated without even neutralizing its daily uptrend, a sign that a new rally was brewing. This extends the current advance - instead of an ongoing decline - into its next intermediate cycle in November 2007. June 2008 is still an even more significant - and longer-term - cycle.
Editor's Note: Eric Hadik is editor of Insiide Track, P.O. Box 2252, Naperville, IL 60567, 1 year, 12 issues, $179. www.insiidetrack.com.
