Charts of the Day - EUR/USD

Daily Forex Technicals | Written by TheLFB-Forex.com | Aug 10 08 19:02 GMT |

Obviously, everyone is looking at the dollar's strength against the euro but we must always be aware of the .90 correlation with oil. With the situation in Georgia apparently worsening we have to consider the possibility that because of potential supply disruption, oil may see a bit of a comeback. Georgia is a key link that connects the Caspian Sea region with world oil markets, bypassing Russia. There are some news stories regarding Russian naval blockades but these are sketchy. The battle is over a region that lies within central Georgia called South Ossetia which has long maintained its ties with Russia. It does look as if Russia will have control of this area (which would have no effect on oil supplies); although a top Russian defense official said Sunday that Russia had no immediate plans to move troops into Georgia itself. As far as oil is concerned, this is where the bottom line is. On a technical basis, EUR/USD is just above the next band of interest, and a break of the support which lies in a small zone between 1.4967 and 1.4951 (especially with a daily close) below there points the way towards the lower 1.4300's. The LFB-Forex.com