Daily Trading Forecast

The Day After

Wed, Jul 16 2008, 10:56 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG


Yesterday the U.S. dollar spiked lower against all the world`s major currencies taking EUR/USD to a new record high at 1.6038 and USD/SFR down close to parity. Afterwards, the dollar recovered almost immediately and finished the rest of the day with directionless and choppy trading.

 

Lately, oil prices and the U.S. equity markets have influenced currency trading making any attempt to forecast forex movements extremely difficult. As a consequence we are reducing the amount and size of our trades.  


EUR/USD

 

After yesterday`s move to a record high at 1.6038 the pair is currently trading at 1.5930. We see a good bid tone in the market and feel that traders will make another attempt to test the high and would buy at 1.5900 or below for a target  of 1.6038, with a stop at 1.5835. See chart.  

 

GBP/USD

 

The pair is currently trading at 2.0043 after breaking the important 2.0000 level in yesterday`s rally. We see a slightly less enthusiastic bid tone to the GBP/USD today and feel the pair will test the 2.0000 handle again in today`s trading. If that support holds we expect cable to trade higher.  

 

USD/CHF

 

Currently trading at 1.0078 the pair has recovered after falling to near parity yesterday. Interest in the USD/CHF is waning and we do not expect much action up or down in today`s market. This lack of interest is due mainly to the summer vacations in Switzerland.   

 

USD/JPY

 

Th USD`s sharp decline yesterday took the pair down below 105.00, and is currently trading at 104.14. The appetite for the Yen is due mainly to increased risk aversion. We see the next support level at 102.60, which  we feel will hold in today`s trading.  

 

 

GBP/USD Chart

 

 

 

EUR/USD

 

 

 

 

 

 

 

Published on  Wed, Jul 16 2008, 11:09 GMT

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Swiss e Trade AG shall not be responsible for any loss arising from any investment based on any recommendation, forecast or other information herein contained. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Swiss e Trade that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated.

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