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Forex − Dollar get support from news Buffet 5bio in Goldman Sachs and extended Federal Reserve swaps lines to Central Banks

Thu, Sep 25 2008, 10:22 GMT
by Peter Rosentreich

ACM - Advanced Currency Markets

Forex News and Events:

The Dollar edged up for a second day on Wednesday, helped by the view that the credit crisis was not just a problem for the US economy and currency, but would spill over to the rest of the world.

The Yen fell, as investor confidence in the Dollar returned, after news US billionaire Warren Buffett will invest $5bio in Goldman Sachs, and after the Federal Reserve extended currency swap lines to more central banks. The euro also came under selling pressure after data showed a sharper-than-expected drop in German business sentiment. But uncertainty about the US Treasury's bailout plan, being debated by Congress this week, restricted the greenback's advance, analysts said.

Testifying to the US Congress on Wednesday Federal Reserve Chairman Ben Bernanke urged immediate approval of the US Treasury's rescue proposal to thwart "serious consequences" for the US economy and financial markets.

EurUsd fell 0.22% to 1.4653. UsdJpy was up 0.47% at 106.10 as traders sold low cost Yen to finance riskier investment. EurJpy gained 0.26% to 155.47. UsdChf rose 0.27% to 1.0880. GbpUsd went 0.26% lower at 1.8522.

Today's Key Issues (time in GMT):

06:00 EUR August German GfK consumer sentiment 1.8 vs 1.5
07:30 EUR Q2 Netherland GDP final nsa 2.8% vs 2.8% (yoy)
07:30 EUR Q2 Netherland GDP final sa 0% vs 0% (qoq)
08:00 EUR August Euro-zone Money – Private loans 8.9% vs 9.4%
08:00 EUR August Euro-zone Money – M3 annual growth 9% vs 9.3%
12:30 USD August Durable goods ex-defense 1.1% vs 2.9%
12:30 USD August Durable goods ex-transport -0.5% vs 0.7%
12:30 USD August Durable goods orders -1.6% vs 1.3%
12:30 USD weekly Initial claims 448k vs 455k
12:30 USD August Non-def cap good ex-aircraft -1.4% vs 2.5%
14:00 USD August New home sales-units 510k vs 515k
14:00 USD Fed's Bernanke and Treasury Secretary Paulson testify on GSE's before House Financial Services Committee
17:00 CAD Bank of Canada Gov. Carney speaks on recent economic developments, Montreal
22:45 NZD Q2 GDP – annual avg 2.3% vs 2.3%
22:45 NZD Q2 GDP – annual 0.6% vs 1.9%
22:45 NZD Q2 GDP Production based -0.5% vs -0.3% (qoq)
23:30 JPY August CPI, core nationwide 2.4% vs 2.4%
23:30 JPY September CPI, core Tokyo 1.5% vs     1.5%

The Risk Today:

EurUsd Market recovered last Monday up to 1.4867 from 1.3882 three-week low. On the current upside, only a return over 1.5000 and 1.5500 will release actual pressure and may put key initial resistance 1.6000 into focus. Still a break up there would open the way to Trendline resistance 1.6200. But renewed weakness below 1.4250 will put the focus on strong support 1.3666 December 2004 high and 1.3056 support (retracement of 0.8231 – 1.6039 advance).

GbpUsd Cable posted 1.7447 low two weeks ago. It recently rose to 1.8669 high. On the upside, strong resistance holds 1.8795 21st August high. Former support 1.9363 holds also strong resistance. Key level holds 2.0100 resistance. Renewed weakness below 1.7447 may find support on 1.7422 (50% retracement of 1.3682 – 2.1161 advance). Strong support holds 1.7251 3rd April low.

UsdJpy Last week strong volatility posted 104.20 to 106.20 consolidation range before recovery to 108.02 Friday high and initial resistance. Further advance will put 110.67 15th August high. Renewed pressure below 105.88 initial support may open the way toward 105 pivot (38.2% retracement of 95.75 – 110.67 advance), as well as 103.54 last week low and 100 pivot point.

UsdChf Market rose as high as 1.1418 two-weeks ago and strongly reversed 2-month uptrend last week. High volatile Friday session posted 1.1280 high initial resistance and 1.1007 low. On the downside, only weakness below 1.0734 former resistance would undermine the current trend and open the way down to 1.0500 and 1.0375. This move could also test the 1.0013 15th July low in front of 0.9637 17th March low. Initial resistance holds 1.1280 Friday high ahead of 1.1418 11th September trend high. Strong resistance holds 1.1593 December 2007 high.

Resistance and Support:

Published on  Thu, Sep 25 2008, 10:30 GMT