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FX Thoughts for the Day

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FX Thoughts for the Day

Tue, Oct 7 2008, 11:28 GMT
by Kshitij Consultancy Service Team

Kshitij Consultancy Service

EURO, JAP YEN and EURO-YEN
---------------------------
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 @ 1.1418/22... Support at 1.1400 crucial
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R: 1.1450 / 1.1480-1500 / 1.1540 / 1.1575-1600
S: 1.1410-20 / 1.1370 / 1.1350-35 / 1.1300
An intra-day dip to 1.14 has seen some buying develop however, the pair has been trading pressured below 1.1450.

Overall, the pair seems to be in a decent uptrend however, the uptrend could now be challenged by the Resistance at 1.1490-1500. As long as the Support at 1.14-1380 holds the pair could rise towards and beyond the 100-week SMA at 1.1440 where it faces some Resistance intra-day. 1.14 is an important level from here as happens to be the 61.8% retracement from 1.1248 (Jun-07) to 0.9637 (Mar?08) and if holds, it could provide the momentum required to rise past the Resistance at 1.15 as well.

Limit Buy Order:
Buy 10K USD at 1.1380, SL 1.1280,TP 1.1480
 

GBP-USD @ 1.7486/90... Mixed for now
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R: 1.7500 / 1.7550 / 1.7600-20 / 1.7680
S: 1.7450 / 1.7400 / 1.7360 / 1.7300
Cable has once again dipped to a low of 1.7320 during the day after facing Resistance at 1.7600-50. 1.7320, the low today, is also where it had found Support earlier and could now lead to a rise during the US session towards 1.76 once again.

However, buying is difficult at such levels. There is an outside chance that the 100-month MA at 1.7341 could break and this could result in the pair slipping towards 1.7000-1.6936, the 200?month SMA. The break below 1.7340 might not be seen immediately.

To see the chart click on: http://www.kshitij.com/graphgallery/gbpcandle.shtml
http://www.kshitij.com/graphgallery/gbpmth.shtml
In such volatile market conditions it is important to keep and eye on the longer-term charts like weekly and monthly charts intead of the 4-hourly and daily charts.

AUD-USD @ 0.7192/96... Support at 0.70
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R: 0.7200 / 0.7260 / 0.7300 / 0.7375
S: 0.7150 / 0.7100 / 0.7060 / 0.7000-0.6990
The pair faced some strong Resistance near 0.7350 during the day, and a slip from there has brought the pair to the level of 0.7150. However, with important Support at 0.70, 200-month SMA and 100-month SMA it is difficult to trade on the pair.

Overall, as long as the Support holds the pair is bias to rise towards 0.7550-80 However, the day has seen it’s share of rise and might not see a further rise from here. In a surprise move the RBA has cut interest rates by 100bps, instead of the expected 50bps, to 6.00%.

To see the chart of interest rates click on: http://www.kshitij.com/fundamentals/funcharts/aurba.shtml

Happy Trading!

Published on  Tue, Oct 7 2008, 12:00 GMT