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Daily Trading Forecast

Credit Markets Back at Work Again

Mon, Nov 10 2008, 11:00 GMT
by Swiss e Trade Strategy Team

Swiss e Trade AG

It had to come. Overnight, U.S. rates dropped sharply below 3-month LIBOR and stayed below it for quite a few days now, a sure sign that at least the banks had begun to lend to each other again. The confidence now filtering back into the system must increase though, with the wholesale and retail credit market end improving the business and private lending environment. There, still significant premiums are charged, further darkening the economic outlook. But that is merely the sorrow of equity markets, not Forex. This market was more concerned about the scarce liquidity in the system, an awful situation which hopefully is now history.

For today’s trading, we are looking for a selling point in the USD, where the EUR / USD and GBP / USD pairs should provide ample opportunity. Right now, in the early European trading hours, these pairs are on the bid side and thus not oversold enough to offer a good entry point at this time. See the major pairs’ detailed description below. On the data release front, it will be a quiet day, with no significant economic news scheduled.

by George Clement

Intraday Market Outlook for Day Traders

EUR / USD
The pair, currently trading at 1.2853, is in an upmove this European morning. We expect the bid tone to continue today, but would wait for a down correction to materialize first. 1.2780 would be a good entering point to buy the EUR / USD, 1.2950 the objective for today’s trading.

GBP / USD
Cable is in the mid-point of our today’s assumed trading range now, currently priced at 1.5734 and in an upmove. We expect this upmove to be limited at 1.5800 in today’s trading, while the downside is protected by the 1.5680 support.

USD / CHF
The dollar is currently trading at 1.1740 against the Swiss franc and up a tone, after moving lower in late Asian and early European trading. We expect the upside to be limited for today at 1.1780, where a downmove to the 1.1650 support level is in the cards today.

USD / JPY
Against the yen, the dollar moved up in all of Asian and early European trading, a move that most probably will end soon today. Currently priced at 99.28, the upmove is about to meet resistance already. Prices above 99.35 could be the trigger for a weaker phase, towards today’s support at 98.75.

Published on  Mon, Nov 10 2008, 11:01 GMT