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Daily Forex Technical Report

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Daily Forex Technical Report − Dollar Higher after Obama Win but Short Term Outlook Mixed

Wed, Nov 5 2008, 08:04 GMT
by ActionForex.com Team

ActionForex.com

Action Insight Daily Report

Dollar Higher after Obama Win but Short Term Outlook Mixed

The forex markets remain generally mixed in consolidation phase. Dollar recovers after Obama's victory in the US presidential election and on hope that the first African-American president of US and the Democrats will speed up policies that help overcoming a recession. Dollar index is back above 85 level after diving to 84.45 earlier yesterday. Crude oil and gold also retreats from this week's high. While the markets are generally mixed, Sterling is noticeably the weaker one this week so far ahead of BoE rate decision. On the other hand, the Canadian dollar is supported by the rebound in oil prices and is the relatively stronger one this week so far.

Though, technically speaking, firstly, the current price actions in dollar and yen are treated as consolidations only. The larger down trend is still in force even though the current consolidation may extend further. Short term outlook will remain mixed though as the path of the choppy consolidation is rather unpredictable. Also, note that USD/CAD is somewhat losing downside momentum as it's approaching 1.1304 support which the fall could be contained.

On the data front, UK nationwide consumer confidence unexpectedly improved to 55 in Oct. Australia trade surplus widened to record 1460M in Sep. Upcoming in the European session, UK Services PMI, industrial production and manufacturing will be released. Eurozone finalized Services PMI and retail sales will also be featured. ISM non-manufacturing index and ADP employment report will be the main focus in US session.

More Forex Technical Analysis Reports Here.

GBP/JPY Daily Outlook

Daily Pivots: (S1) 154.61; (P) 158.15; (R1) 162.61; More

No change in GBP/JPY's outlook as consolidation continues inside range of 153.35 and 165.02. While the corrective price actions from 165.02 suggests that further upside is likely, break of this high is still needed to confirm. In such case, the near term falling trend line will also be taken out and stronger rebound should then be seen towards 181.37 resistance. On the downside, note that break of 153.35 minor support will suggest that rise from 139.02 has completed and bring retest of this low.

In the bigger picture, similar to EUR/JPY, the question now is on whether fall from 251.09 has completed a five wave decline already. But in either case, more consolidation should now be seen as long as 139.02 low remains intact. The differences are that if a five wave sequence is already completed, consolidation from 139.02 will extend further towards 181.37 and will take longer time to complete. But in either case, firstly, upside should be limited by 181.37 resistance. Secondly, the long term down trend is still expected to resume after the consolidation. Thirdly, break of 139.02 is needed to confirm that such down trend has resumed.

For Crude Oil and Gold analysis, click here

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Published on  Wed, Nov 5 2008, 08:14 GMT