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FX Thoughts for the Day

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FX Thoughts for the Day

Wed, Oct 8 2008, 12:10 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 @ 1.1328/29... Resistance at 1.1440-1500
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R: 1.1395 / 1.1445 / 1.1475-90
S: 1.1297-82 / 1.1220 / 1.1150
As feared, Dollar-Swiss dipped in the day to a low near 1.13. It has come off from a high near 1.1490. The 1.1295-80 region is an important Support. If that breaks, a further fall towards 1.1220-1180 could be seen. Chances of such a fall are growing. Keep in mind that there is a strong Resistance near 1.1438, being the 100-week MA. Further, the 20-day MA is trading flat near 1.1150, suggesting that the market could be in a range of 1.09-15. Thus, selling on a break below may be considered.

On the flip side, a rise past 1.15, if seen, would suggest a further rise towards 1.16-17.
 
 GBP-USD @ 1.7548/53... Could rise from here
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R: 1.7600 / 1.7658 / 1.7700 / 1.7750
S: 1.7340-10 / 1.7248 / 1.7200 / 1.7150
In the BIG picture, the 100-Month Moving Average provides Support at 1.7340. The Bollinger Bands on the Weekly chart provide Support at 1.7248. The market could now see Cable rise from here towards the immediate Resistance at 1.7667.

With the global interest rate cuts by the central banks, the market could be in a daze and could behave irrationally over the US session today. HOwever, the added liquidity could help Cable rise from the recent lows.

 
 AUD-USD @ 0.6858/63.... Bounce seen after rate cuts
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R: 0.6875 / 0.6950 / 0.7000 / 0.7075
S: 0.6725 / 0.6665 / 0.6600 / 0.6540
The interest rate cut by 50% FED, along with other central banks, has resulted in the pair seeing a sharp bounce from the lows of 0.6435. The pair however, continues to trade lower by close to 300-pips for the day.

Where to from here??
The technicals suggest that the pair could bounce from here towards 0.7000. There is an outside chance of the pair rising towards 0.7150 as well. Buy dips to 0.67 as the Aussie is likely to go up to 0.70.

Happy Trading!

Published on  Wed, Oct 8 2008, 12:17 GMT