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FX Thoughts for the Day

Thu, Aug 7 2008, 10:55 GMT
by Kshitij Consultancy Service Team

Kshitij Consultancy Service

EURO, JAP YEN and EURO-YEN
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Read our current comments and trade recommendations on EUR-USD, USD-JPY and EUR-JPY by registering at
http://www.kshitij.com/fxthoughts/fxthoughts.shtml#register

Our comments on Dollar-Swiss, Sterling Pound and Australian Dollar are given below
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USD-CHF @ 1.0550/55.... Could trade between 1.0550-600
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R: 1.0600 / 1.0625 / 1.0650
S: 1.0550 / 1.0500 / 1.0470 / 1.0450
The pair is not being able to sustain at levels close to or above 1.0600 and as result the pair has come down to touch the Support at 1.0550. However, from here it is difficult to anticipate the immediate future, as there remains a level of uncertainty.

The pair could continue to vacillate in the tight 50-pip range of 1.0550-1.0600 till later in the US session where a break out may be seen on the upside.

Till then keep a close eye on Euro, which has a good negative correlation with USD-CHF. 
 

GBP-USD @ 1.9511/15... BOE ahead
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R: 1.9535-50 / 1.9600-20 / 1.9650
S: 1.9450-35 / 1.9400 / 1.9366
Just ahead of the BOE meeting the pair seems to be building up a possibility of a rise towards 1.96. This could sound strange, however, the rise is only expected to be a spike on the bigger picture which otherwise continues to remain bearish overall.

With a change in rates completely ruled out, the pair could react in a positive manner to a neutral statement as well. Till now the market has been discounting a dovish statement from the BOE as the economy is on the verge of a recession. As the economic releases are going from bad to worse and the housing crisis continues to grow, while the economy itself is stagnant, there is little hope that the recession could be avoided.

In the day, expect Resistance on a rise to 1.9597, also the Max High for the day. A rise beyond it, if seen, could be checked at 1.9650, the Support turned Resistance. A dovish statement could result in a further dip in the pair and result in a test of longer term Support at 1.9400-1.9393, also the Max Low for the day.

To see the Interest Rate chart/ BOE announcement click on:
http://www.kshitij.com/fundamentals/funcharts/ukboe.shtml

AUD-USD @ 0.9110/14... Expect a dip till 0.9135 holds as Resistance
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R: 0.9150-65 / 0.9200 / 0.9235-50
S: 0.9100 / 0.9043 / 0.90
Overall bearish bias is prevalent, however, the pair seems to have paused to take a breath before continuing its bear run.

In the day, it continues to face Resistance at 0.9120-33, however, the dip that we have been looking out for has not materialized. A break of Support at 0.9100 would be very bearish and target 0.9043 over the rest of the day. In an unlikely move, if the Resistance at 0.9130 breaks, a rise towards 0.9175-0.92 could be seen.

To see the chart of AUD-USD on our website click on:
http://www.kshitij.com/graphgallery/audcandle.shtml
http://www.kshitij.com/graphgallery/audma.shtml

Holding:
Short 10K USD at 0.9102, SL 0.9165, TP 0.9053

Happy Trading!

Published on  Thu, Aug 7 2008, 10:59 GMT