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FX Thoughts for the Day

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FX Thoughts for the Day

Thu, Aug 14 2008, 11:05 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 @ 1.0866/71.... Can continue trading in the range
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R: 1.0900 / 1.0920 / 1.0960 / 1.1000-25
S: 1.0850-40 / 1.0800 / 1.0750-35
The pair has been calm in the day and can continue to vacillate within the 100-pip range of 1.0800-1.0900. For the day it has been trading in the upper region of this tight range and can continue to do so over the week. Going in to next week it is important to note the momentum.

Last month has seen a good deal of dollar bullishness on the back of falling commodity prices and slightly positive economic data from the US. However, with the retail sales once again declining and Crude oil inventories seeing a dip as well, a correction could be seen over the coming week.

Overall for now, a rise towards 1.1050is favoured as long as the Support at 1.0750 holds. This said, there is a strong Support at 1.0800 as well and it might not break.
 

GBP-USD @ 1.8761/65... Support held.
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R: 1.8775 / 1.8840-50 / 1.8890
S: 1.8720 / 1.8700-10 / 1.8650
The Support at 1.8700-8650 held in the day, resulting in the pair stabalising earlier in the day. For now a rise towards 1.88 and beyond could be possible if the US CPI data is released lower than expected.

The market overall has been discounting the economic data releases from the UK, which have been indicating a deteriorating health of the nation. For now, if the housing slump continues and the unemployment rate rises with negligible growth of the economy in a time when inflation is seen at double the comfort level, it wont be long before the economy falls into a recession. If it does, the pair could be headed towards levels close to 1.80-75 in a very short span of time.

 
 AUD-USD @ 0.8768/72... Could rise further.
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R: 0.8805 / 0.8825-35 / 0.8875
S: 0.8730-00 / 0.8660 / 0.8625
A bounce has been seen in the pair today that has brought it close to the important intra-day Resistance at 0.88. A rise towards 0.88 was mentioned earlier in the day. However, we were expecting such a rise only after a dip towards 0.85.

From here, the hourly chart is indicating the possibility of a rise towards 0.90. However, it would be a little too early to base a trade on that. A close above 0.88 today would probably give more confidence to enter long in a bear market.

Happy Trading!
 

Published on  Thu, Aug 14 2008, 11:50 GMT