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Post−Fed, Pre−ECB Rates Decisions
Thu, Jun 26 2008, 10:41 GMT
by Swiss e Trade Strategy Team
Currency traders got what they expected from the FOMC last night (Fed kept rates on hold) and the European currencies rallied as a consequence. The ECB is next in line and Mr. Trichet has all but confirmed in writing an ECB hike of 0.25%. Today, though, most people expect the ECB planned hike to be a "one-off" affair.
This scenario leaves the currency markets back at the mercy of oil prices which, at the time of this writing, are rallying to today's current high at $135.23.
Intraday Market Outlook for Day Traders
EUR / USD
The EUR / USD is currently trading at 1.5675, close to resistance at 1.5685, after having rallied yesterday in afternoon New York trading following the Fed decision to leave interest rates at 2%. The EUR / USD rally we’d expected after the FOMC meeting took place within an extremely short period of time. For the Euro to make any subsequent gains today, the 1.5685 resistance must be convincingly broken and, if this transpires, prices should reach 1.5840, next resistance. In today’s trading, many investors were disappointed the Euro didn’t rally higher. We could see long positions closed out and prices falling to first support at 1.5630, where we expect to see new long positions established.
GBP / USD
The GBP / USD received some support today from comments from the Bank of England’s Mervyn King and is trading up to its current level at 1.9778. Technical indicators for cable point to higher prices today and we feel that the next resistance level at 1.9850 could be tested. For bold traders, we would suggest waiting for a pullback to 1.9750 support for a target of 1.9850 and with a stop at 1.9700. See chart below.
USD / CHF
In the USD / CHF, we see support at 1.0300 with prices trending downwards. Currently, the market is trading at 1.0330. In general, trading volume in the USD / CHF remains very low. We feel, unfortunately, prices will remain in the tight trading range between support at 1.0300 and resistance at 1.0450.
USD / JPY
The USD / JPY yesterday remained unmoved by the FOMC decision to keep rates on hold and Bernanke’s comments afterwards. Currently, the USD / JPY is trading at 107.83. Good support is found at 107.15 and resistance at 108.50, which we feel could be tested in today’s trading. Any big moves will be seen only after resistance is clearly broken.
GBP / USD Chart
Published on Thu, Jun 26 2008, 10:56 GMT
Archive
- USD About to Meet Resistance Levels Again
Published On Tue, Dec 2 2008, 10:55 GMT - Increasing Pressure on ECB to Lower Rates Soon
Published On Mon, Dec 1 2008, 11:21 GMT - USD Ranging in Thanksgiving Mood
Published On Fri, Nov 28 2008, 11:05 GMT - Major Pairs' Countertrend Moves Stifled Again
Published On Thu, Nov 27 2008, 11:20 GMT - More Power, Igor
Published On Wed, Nov 26 2008, 11:38 GMT
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Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. FXstreet.com has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.
Any opinions, news, research, analyses, prices or other information contained on this website, by FXstreet.com, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXstreet.com will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
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