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Daily Trading Forecast

The Aftermath of Ferocious Wednesday

Thu, Oct 9 2008, 10:08 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

Three very rare actions might cause the turning point in the global credit crisis. After the unprecedented announcement Tuesday by the U.S. Federal Reserve that it will lend directly to the corporate sector, the world’s central banks cut interest rates by half a percentage point in a coordinated move Wednesday, and, if that’s not enough, the British government promised to secure lending among the country’s banks. If that does not bring relief, what else could? In the financial markets yesterday and in this European morning, at least some signs popped up that it will work. Among them, the recent liquidity squeeze in dollars seems to be easing somewhat now, allowing the Greenback to correct some of its quick gains in the last two weeks especially against the Euro.

In today’s trading, we expect the recently begun down correction of the USD vs. the EUR & CHF to continue, with quite a different picture against the yen. Here the dollar already nearly lost all of its gains made since March this year. More volatility today is possible, with several central bankers to speak. Scheduled data releases include U.S. weekly jobless claims at 14:30 CET.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair’s recovery this European morning brought it to current prices of 1.3750 so far, where we expect an intraday down correction to approximately 1.3690. From there, further upmoves are in the cards, this time breaking the resistance at 1.3800 on the upside.

GBP / USD
After reaching a low of 1.7170 in late Asian trading, cable recovered in early European hours to the current 1.7325. We expect it to reach 1.7390 soon, where a massive resistance zone has to be overwhelmed. We see rather a sideways market for today, stretching from the 1.7390 level down to current prices.

USD / CHF
The still new down correction move of the dollar against the Swiss franc is pausing this European morning, with the dollar currently priced at 1.1260, with a mild selling tone. We see the level 1.1215 being tested in today’s trading and eventually broken on the downside to the level of 1.1180.

USD / JPY
In contrast to other major pairs, the USD / JPY recovered over 200 pips in Asian and early European trading and is currently at 101.16 near today’s high so far. We expect further upmoves to 102.70 for today.

Published on  Thu, Oct 9 2008, 10:10 GMT