Renewed concern about the depth of the subprime mortgage crisis shadowed a truly good US trade deficit report on Tuesday. The dollar was all over the place, up against the pound and down versus the yen, which suggests further weakness in the yen crosses today. Keep an eye on the US retail sales report; the oomph from the tax rebates should be about over, so the report is important.

Euro/dollar
The oversold euro/dollar sank to yet a new low for the downtrend, but recouped losses and formed a possible bullish reversal. My model remains short since July 22, so buy it only on a confirmation.

Initial support remains at 1.4860. A new pivot low is at 1.4816. Below 1.4735, distant support now moved to 1.4440.

Immediate resistance is now seen at 1.4965. Above 1.5000, the next levels are 1.5065 and 1.5110. Distant resistance is at 1.5200.

Oscillators are declining.

NEAR-TERM: Mixed with upside risk
MEDIUM-TERM: Bearish
LONG-TERM: Mixed

Dollar/yen
Dollar/yen fell from an eight-month high and my model went short. This is the only major pair against which the model sold. The new key Gann pivot that rules is at 109.15.

Support is now pegged at 108.65. Strong support follows at 107.95 from a 50-point pivot, which targets 107.45 and 108.45.

Immediate resistance is at 109.15 from a 50-point pivot, which targets 109.65 and 108.65. The next key level is 110.35 from another 50-point pivot, which targets 109.85 and 110.85.

Oscillators are falling.

NEAR-TERM: Bearish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed

Sterling/dollar
Sterling/dollar collapsed on Tuesday to a new low for the downmove amid renewed fears of stagflation and the selling pressure should continue. Cable remains on track for the target of a long-term head-and-shoulders pattern that targets the 1.7550 area.

It reached several extensions and immediate support is now at 1.8910. Further support is seen at 1.8853. Distant support follows at 1.8730.

Initial resistance now comes at 1.9015. Above 1.9120, further resistance comes at 1.9180, 1.9270, 1.9325 and 1.9420.

Oscillators are falling.

NEAR-TERM: Bearish
MEDIUM-TERM: Bearish
LONG-TERM: Mixed

Dollar/Swiss franc
Dollar/Swiss slipped from a new high after testing the top of the rising channel and formed a potential bearish reversal formation. My model remains long since July 22, so sell it only on a confirmation. All eyes remains on the channel line at 1.0935.

Immediate resistance is at 1.0935. Above it, key resistance remains at 1.1055. This is followed by 1.120o.

Initial support is pegged at 1.0830. Below 1.0725, support is now seen at 1.0620 and 1.0505.

Oscillators are rising.

NEAR-TERM: Bullish
MEDIUM-TERM: Bullish
LONG-TERM: Mixed