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Daily Forex Technical Report

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Daily Forex Technical Report − Dollar Steady as Debates on Rescue Plan Continue

Wed, Sep 24 2008, 08:07 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Daily Report

Dollar Steady as Debates on Rescue Plan Continue

Dollar continues to trade in tight range against most major currencies as there are growing skepticism about Paulson's $700b bailout plan. Lawmakers are demanding changes to the rescue plan and the debate will likely drag on for some time. Movements in the dollar will likely be dominated by commodity prices before the picture clears out. Bernanke will testimony before Joint Economic Committee today and will catch much attention from the markets. The more noticeable movements in Asian session are in the Japanese yen on news that Warren Buffett's Berkshire Hathaway is investing at least $5b in Goldman Sachs. The investment is viewed as a huge vote of confidence by the markets and boosted some confidence on the survivors of the credit crisis.

On the data front, German Ifo business climate dropped for the fourth consecutive months to 92.9 in Sep, below expectation of 94.3. Eurozone current account deficit widened slightly to -1.1b in Jul. Looking ahead, Existing home sales from US will be released later today and is expected to give back some of Jul's surprised gain and fall back to 4.96m annualized rate.

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GBP/JPY Daily Outlook

Daily Pivots: (S1) 194.75; (P) 195.67; (R1) 196.41; More

GBP/JPY strengths mildly today and break of 197.16 indicates that rebound from 184.47 has possibly resumed for 202.50/206.51 resistance zone. But upside should be limited there and bring down trend resumption. On the downside, below 194.30 will turn intraday outlook neutral again. Further break of 189.74 support will indicate that rebound from 184.47 has completed and should bring retest of this low.

In the bigger picture, whole down trend from 251.09 has resumed after corrective rebound from 192.60 was limited at 215.87 by 55 weeks EMA. Such decline is expected to extend further to 61.8% projection of 251.09 to 192.60 from 215.87 at 179.72 (close to 180 psychological support) first. While some rebound should be seen in near term, medium term outlook will remain bearish as long as 215.87 resistance holds.

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Published on  Wed, Sep 24 2008, 08:12 GMT