The Dollar jumped more than 120 pips from its 15-year low which it hit on Tuesday at 83.58, reflecting a “fear” of what the BoJ might do! In the attached chart, which is a weekly one, we can see the falling channel from Sep 07 top. Although the bottom of this channel is very far away, and is just above 74, but there is an interesting trend line inside it, combining the monthly lows of Dec 08, Jan & Nov 09. This line is around 82.65 currently, providing us with a perfect target for this dropping wave, which we expected, from the very beginning, that it will dive below 84.81. Let’s leave the daily & weekly charts we have been obsessed with lately, and just focus on the hourly chart. We can see that there is a very exciting trend line, dropping from June 4th top. This line is running currently at 85.28. Therefore, all of our attention is at the exciting trend line & the importance it provides. As long as we are trading below this line, the downtrend will be ok, but if we break the resistance 85.28 we will shoot up targeting 86.81 and may be 87.70. The support is provided by 84.07. If broken, there will be nothing stopping the price from reaching our awaited target 82.65, except for the BoJ. And if the “Japs” keep quiet, we could see 79.75 later, may be next month.

Support:

• 84.07: Fibonacci 61.8% for the rise from Tuesday’s low, and 15-year low 83.58.

• 82.65: the trend line combining the monthly lows of Dec 08, Jan & Nov 09, on the weekly chart.

• 79.75: this pair’s historical low.

Resistance:

• 85.28: the falling trend line from June 4th top on the hourly chart.

• 86.81: Jul 26th & 27th low.

• 87.70: June 26th top