The Dollar gains; while Oil, Gold, and Corn have all declined in the last few weeks.   The news is good for the U.S. consumer as many have been reluctant to spend and travel due to the increased costs.   This could bring a surge in confidence and spending for the U.S. in the coming months.   Some could say we have reached the bottom and others could say this is just another correction in the longer term outlook.   There are a couple of variables we could throw into the mix; Russia’s military offensive in Georgia and Iran & Israel’s issues.   The one dominating today’s news could arguably be the Russia and Georgia developments.   Economically, Georgia has a pipeline in which $10 trillion of oil reportedly runs through.   What if this is disrupted and causes fluctuations in the market?   NATO could step in and so could the U.S. military as Georgia is the third largest military occupant in Iraq (just recalled home to aid), making them an ally to the U.S.  Let’s not forget Iran and Israel is on the brink of war due to Iran’s nuclear developments.  FYI, Gold fell through major support today of $845 making a new yearly low below $820.   The home stretch of 2008 could be a major pivot for the next few years.

The Euro session pushed the Euro up vs. the dollar to 1.5080 from lows of 1.4930.   Then the U.S. session spoiled the gains with new lows below 1.4900.    The zone we are in now is previous resistance from the beginning of the year and could show some bullish patterns back to 1.53 and above in the coming days – weeks.   There looks to be some downside pressure at the moment still and we must identify the risk / rewards.   The previous price in which there were pivotal moves in December and January was around 1.4665.   The bottom of the previous consolidation (and 38.2 retrace from the 3 yr. bullish move) is around 1.4350 which could arguably be loaded with buyers.   This large drop resembles the previous unwinding that was seen by most yen crosses.   The bulls should be looking for a spike, or sharp reaction to this action taking place.

Another currency bit by the Dollar Bull!   Price came up to 1.9250 and failed from there showing more bearish strength.  1.9000 is a psychological & historical support level the bulls would need to hold to keep the bear from reaching deep levels once seen in 2006.   The resistance looks back up at the 1.9400 levels while in the short term could be 1.9245-50.

The Yen is dancing on the 110 level, 50.0% retracement from the beginning of the credit crunch, which is nice because as it trades in a tight range it is easy to establish a short term support and resistance.   The high of today, 110.40, looks to be our resistance and support looks to be the trendline made in the last few days, pictured below.