• Home ::
• Technical ::
• Forex Strategy ::
• Market Opinion

• Send
• Print
• Add To

Market Opinion

f754278f-9529-4b2c-ac01-bd82440594bf

12

0

Lack of confidence continues

Fri, Nov 21 2008, 01:02 GMT
by James Whyte

ForexAmericas

Market View for November 21, 2008

U.S. Markets continue losses with continued fundamental lack of confidence.  Once again, a late day decline was led by financials – Citigroup was down 26%, JP Morgan 18%.  The Dow and NASDAQ closed at 5½ year lows, the S&P at 11½ year lows.  Oil closed below $50 at 49.62, and energy stocks followed, down 20-25%.  The Big 3 auto makers would not have enough votes in the House now to save them, so the Senate will give them a new chance to make their case in early December, giving them another shot at a rescue package.  Another interesting note is that Treasury yields also hit historic lows today, driving the Dollar Index higher.  The currency markets reacted to the sell off as expected.

Our Focus Today:

EUR/USD:  Our short view in Euro was correct from yesterday, and we continue to see some weakness in the Euro over the short term.  We would look to sell at the mid 1.25’s, with a stop above 1.2620.  There are many targets in the 1.23’s, and a rising trend line that comes in at 1.2410, but we expect that to be broken after a bounce and will assess the market sentiment at that time.

USD/JPY:  The Yen did not strengthen as much as we thought initially, but USD/JPY and the Yen crosses did react in mid to late NY session.  We look for continued strength in the Yen, and will look to establish shorts at 95.20 – 95.50, with a stop at 96.40 and target today’s low of 93.50 initially.  Below this, 92.60 beckon.

GBP/USD:  After breaking the 1.4890/1.4900 level convincingly (it took some time as U.K. retail sales were better than expected), Cable reached a low of 1.4690 in NY.  We continue to see weakness in the Pound as the global economy continues its slide.  We see a break of November 13th low of 1.4560 in the coming sessions, but 1.4530-60 should be a good place for a bounce at first test.

AUD/USD:  This pair did not regain the support level at .6335 once it broke in Europe, and slid with oil and the U.S. stock market.  .6049 was the low on October 27th, and NY session almost saw that at the close (.6075).  With oil continuing to come down, we do not see any reason to buy commodity currencies.  We would like to see a bounce to .6180-.6200 to establish a short position, with a stop above .6240.

Published on  Fri, Nov 21 2008, 01:09 GMT