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Daily Forex Overview

Fri, Nov 21 2008, 08:34 GMT
by Raivis Zile

Dukascopy Swiss FX Group

Previous session overview

On Thursday, the dollar hit a 17-month high against the Swiss franc and approached a six-year high against the U.K. pound as fearful investors bought greenbacks as a refuge investment.

The yen was the other big gainer Thursday as risk aversion led investors to sell higher-yielding currencies and buy back the low-yielding Japanese currency they had used to fund those bets.

The euro initially strengthened against the dollar, but failed to hold on to its gains as traders pushed the currency below the key psychological level of USD1.25.

The British pound tumbled 1.5 percent against the greenback on Thursday, despite the smaller-than-expected decline in UK retail sales, as interest rate expectations for the Bank of England continue to plummet.

The Japanese yen generally remains below its October 24 highs, but looks likely to push even higher as volatility climbs to record levels and US stock markets tumble.

The Canadian dollar fell over 1 percent against the greenback as global stock markets fell across the board overnight and as oil continued its slide to USD53 a barrel.

The Australian dollar was weaker in late Asian trade Friday, pulled closer to the psychologically crucial US$0.60 level after U.S. stocks fell overnight, despite a late rebound in local share prices. The falls in the currency have been so sharp; the Reserve Bank of Australia again stepped in to support liquidity to stem the pace of selling.

Market expectation

In European session EURUSD remained unable to edge above USD1.2550, slipping back to current level around USD1.2520. Resistance said to remain in place toward USD1.2550, a break above to open a move on toward USD1.2570 with minor stops above. If stops triggered seen opening a move on toward Thursday's NY highs at USD1.2595. Demand seen placed around USD1.2500 938.2% USD1.2423/1.2548), a break below to open a deeper move toward USD1.2470 (61.8%).

USDJPY - The greenback spikes to fresh session high in late Tokyo trade, triggering light stops at JPY95.00. However, traders say offers above the figure initially cap gains to JPY95.02.

USDJPY, EURJPY rising as short-term players buying back due to situation in Japan stocks. USDJPY last 94.78, may rise to 96. EURJPY last 118.51, may rise to 121. Moves mostly position adjustments ahead of Japan's 3-day weekend.

For GBPUSD resistance placed around USD1.4880, USD1.4900/10 ahead of USD1.4925. Support USD1.4805/795, USD1.4780/70 ahead of USD1.4750 and area between USD1.4715/00.

For Friday, no major U.S. data are scheduled for release, but currency investors will watch for comments from several regional Federal Reserve officials who are due to speak at separate events.

Friday will see the release of German and euro zone manufacturing and services PMI respectively.

Most important events of the day

Published on  Fri, Nov 21 2008, 08:36 GMT