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Daily Trading Forecast

Interest Rate Cuts Seem Plausible

Tue, Oct 7 2008, 10:20 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

The market this European morning nourishes further expectations of interest rate cuts in Europe, as illustrated by the lately more stable British pound coming under pressure against the dollar. The market for some time now is by far not as coherent against the Greenback as it was, with the yen the strongest and the euro the weakest currency.

Today we see more volatility in the major pairs, with not only the FOMC’s minutes published at 20:00 CET but with other Fed officials to speak before that, one member at 17:00 CET and the head of the Fed at 19:15 CET.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair made another attempt to recover in Asian and early European trading and is now at 1.3560. There is a clear longer-term oversold situation now which limits further substantial downward potential. We see downmoves in today’s trading not going much below 1.3450 and a recovery up to 1.3590.

GBP / USD
While cable held up remarkably well over the last days, it came under substantial pressure this European morning amid growing belief the BoE would cut interest rates soon. Currently trading at 1.7390 and near its day’s low so far at 1.7325, we expect some recovery moves up to resistance at 1.7450 before further weakness sets in. We see the 1.7325 level on the downside holding in today’s trading.

USD / CHF
The so far very mild downward correction move of the dollar against the Swiss franc is most probably going on in today’s trading, since the dollar is still in long-term heavily overbought territory. Currently trading at 1.1440, we see the 1.1480 level as the ceiling for today, with further downmoves to prices at 1.1340.

USD / JPY
Having recovered from its lows at 100.25 against the yen, the dollar is losing ground again in this European morning, currently trading at 101.60. The unusually high volatility might well continue in today’s trading. We see further downward pressure, bringing the market below yesterday’s low of 100.25.

Published on  Tue, Oct 7 2008, 10:22 GMT