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Forex Technical Analysis

Stocks in the US, Asia and now during European trading are lower as concerns that the six month equity rally has outpaced the earnings prospects.  The Dow reached highs yesterday, just 150 points from the psychological level of 10000 (as been predicting since March 2009), however there is a likelihood that the equity markets will come off these highs to fall in line with earnings expectations before the push over, and to hold, the 10000 level.  The dollar has strengthened on the back of the equity downturn assisted by the UK budget deficit figure coming out to the worst figure that has ever been recorded for any August at $16.1bn ($26.3bn dollars).  This huge deficit figure highlights once again that the global recovery shall be a slow one, not 'V' shaped, as previously thought.  With oil and gold also retreating during this mornings trading, expect further greenback gains into the US session as the demand for risk aversion slows.
Cable trading today off the highs of 1.6456, hitting a low of 1.6295, now at 1.6355/60.  With equity futures looking to open lower along with the sell off of gold and oil cable could easily fall back to lows of today.  The 10000 figure on the Dow the key now for stocks.  Should it break that figure over the coming sessions, expect a sell off before the 'real' push forward back over that figure and the dollar to strengthen.  Cable as seen has been trounced by the euro strength pushing euro sterling to 90.12 at the high, now at 89.90 at time of writing.  Support for the cable trading at 1.6340 ahead of the lows of today at 1.6295/00.  Resistance, should equities move into the green during this afternoons session, expect a move back to 1.6385 ahead of 1.64.  The 1.6465/70 level now major resistance as it not only acts as the weeks 38.2% fib level, but the 2 year 38.2% level also. 
Eurodollar trading back above the weeks 38.2% fib level, coming off the highs of 1.4745/50, to reach lows of 1.4646 (50% ret level for the week) to trade back above the 1.47 level once again.  The single currency holding its own across the board with yen and the pound the hardest hit, the dollar having initially gained is handing that back at time of writing.  Support at 1.4670/75 (38.2% fib ret level for the week) ahead of 1.4645.  Resistance at 1.4710 ahead of 1.4730 and 1.4755 (strong resistance having has two previous attempts).
Yen rangebound during this mornings trading between 91.40/45 and 91.50/10.  A stronger US session will weaken the yen in this afternoons trading back to 91.50 ahead of the weeks lows at 91.65.  Support at 91.10 ahead of 90.90 and 90.70 (38.2% ret level for the week).
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