The first real trading day of 2009 saw decent buying interest in both the US dollar against the euro and yen, and crude oil, trading 2.31%, 1.51% and 4.45% higher respectively as of 2:30 p.m. ET. The fundamental theme seems to be possible Obama tax cuts in the amount of $300B are expected to stimulate the economy. An economic rebound in 2009 is driving both a stronger dollar and higher oil prices. I have called for oil to rebound to $50/bbl in the early part of 2009 on various television interviews as crude was trading between $40-45/bbl. Now, if we can get through $50/bbl, things could get interesting. But back to the intra-day time frame, the equity markets are not responding into the close as we would expect with higher oil and a stronger dollar. The S&P 500 traded to 2:00 p.m. ET high of 936.36, but has since given up most of the gains into the close, currently trading 926.00.

I am very interested to see what, if any, market relationships develop in the first part of 2009. Readers know that my style is to take the traditional tools of technical analysis, with a specialization in Elliott Wave, to the next level by overlaying them intermarket analytics. A knowledge of related markets that will influence your traded market can you help you to navigate through trades, decipher conflicting technical analysis trading signals, and help to calculate risk parameters.

To the 180-minute EUR/USD chart, and despite my bullish fundamental outlook for the dollar, I am still counting EUR/USD as a bullish impulsive count. Equality of waves A and C is just below current levels at 1.3459. The 50% retracement of the entire impulse is at current levels of 1.3575. While EUR/USD remains above 1.3400, I am going to lean towards this count. A break of 1.3400, however, will quickly send me over to alternate count which labels the 1.2418-1.4733 move as some sort of illiquid, dramatic corrective move.



Todd Gordon is a Technical Currency Strategist and Fund Trader with GAIN Capital Group.

Disclaimer
The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.