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Daily Trading Forecast

More Downward Correction in USD to Come

Wed, Oct 8 2008, 10:21 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

No one knows if the bold Fed move yesterday to lend directly to the corporate sector will eventually open up the gummed-up credit markets but that certainly is the right thing to do now, hopefully waking up the paralyzed financial industry. Together with the outlook on further U.S. interest rate cuts, that Fed decision sets a negative aspect for the Greenback, at least momentarily. Chart technical analysis calls for a downward correction anyway, since the long-term situation is still overbought (see EUR / USD daily chart).

In today’s trading, we see the consolidation / correction phase continuing, with a selling tendency for the USD, as explained in detail in the pair outlook below. The U.S. pending home sales index for August will be released at 16:00 CET, although we do not expect it to be a market mover this time. More interesting will be the remarks of Fed member Plosser, speaking at 13:45 CET.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair recovered further in early European trading, currently priced at 1.3635. We see the downside limited at 1.3560 in today’s trading and expect more upmoves to the 1.3740 level.

GBP / USD
Cable continues to trade in a borad sideward channel, currently at 1.7445 near support at 1.7400. We see that support holding in today’s trading, which opens up trading room to the 1.7580 level.

USD / CHF
The dollar, currently trading at 1.1325 against the Swiss franc, continued its downward correction move in late Asian and early European hours. We expect the selling mood to remain intact for today, with upmoves limited at 1.1365, eventually reaching the support around 1.1250.

USD / JPY
Once again the yen represents the strongest currency among the majors, with the dollar rapidly losing ground against it this European morning, and is currently trading at the morning’s lows at 98.82. We expect some upmoves to come, limited, however, at 99.30, and further weakness later, although with no specific forecast as the to support level.

Published on  Wed, Oct 8 2008, 10:23 GMT