Monday February 4, 2008 - 12:25:07 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day - Evening - 04-Feb-2008....1158 GMT
EURO, JAP YEN and EURO-YEN
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Our comments on Dollar-Swiss, Sterling Pound and Australian Dollar are given below
USD-CHF @ 1.0905/09...Expect Buyers on Dips
R: 1.0930 / 1.0970-80 / 1.1000
S: 1.0850 / 1.0802
USD-CHF closed Jan-08 with losses. It has been very volatile in the first two days of February, as it initially dipped to 1.0733 on Friday and then recovered sharply on Friday itself. It has seen a high of 1.0923 earlier today. The important thing to note on the weekly charts is that last 3 candles are showing long wicks on the downside, indicating that sharp falls (below 1.0800) are being used to buy. This is likely to continue this week as well. However, on the upside the Resistance would come in at 1.0970-80, on the trendline on the Daily Candles joining the highs of 1.1417 (28-Dec) and 1.1124 (22-Jan). The pair is likely to stay within 1.0980 and 1.0800-750 this week with buying likely on dips.
The pair is currently just above its trendline on the Daily Charts joining the highs of 1.1628 (25-Dec) and 1.1124 (22-Dec). Now it is likely to move towards 1.0930 and 1.0970-80. The statistically projected Max High for the day is at 1.1000. For today the immediate Support is at 1.0850 and then at 1.0802, the statistically projected Max Low for the day. We expect buyers to step in on sharp dips towards 1.0800 and below.
GBP-USD @ 1.9769/74....Holding Short
R: 1.9790-94 / 1.9830 / 1.9870
S: 1.9740 / 1.9680
GBP-USD closed mixed for Jan-08, after it saw sharp losses in first three weeks of the year to a low of 1.9337 on 22-Jan. It then rose to a high of 1.9960 last week and has come off again from there, ahead of the BOE meeting on Thursday, where a 25bps rate cut is expected. Note that the 20-Month MA at 1.9767 is likely to act as a Resistance this week. The Support is at 1.9550-50, a break below which on a closing basis could be very important. Nevertheless, we expect selling on rallies in the pair while below 1.9850.
The pair rallied to a high of 1.9778, and is currently just below its Resistance of 1.9790-94, the statistically projected Max High for the day. Above this the Resistance would be at 1.9840. On the downside the Supports are at 1.9740 and then at 1.9680. We are holding a Short position currently.
GBP 10K Short at 1.9710, SL 1.9820, TP 1.9600
See BOE rate and GBP Libor chart at
AUD-USD @ 0.9067/72...Holding Long
R: 0.9095-0.9100 / 0.9131
S: 0.9020 / 0.8960
AUD-USD rallied in the month of January-2008 and has started Feb-08 with gains as well. It is being supported by prospects of the RBA rate hike, which is expected tomorrow. It had a sharp rally last week and is trading at an 8-week high. This week the initial Resistance would come in at 0.9095-0.9100, which is on a trendline on the Daily Candles joining the highs of 0.8908 (12-Dec) and 0.9023 (15-Jan). Above that the Resistance is at 0.9200. On the downside the Support is at 0.8900, which is likely to hold.
The pair has displayed impressive momentum during the day and the immediate Resistance is at 0.9095-0.9100. Above that the Resistance would be at 0.9131, the statistically projected Max High for the day. On the downside the Support is at 0.9020 and 0.8940, on the trendline on the 4-Hourly joining the lows of 0.8511 (22-Jan) and 0.8818 (30-Jan). We are holding a Long position currently, and would like to buy further on a dip.
AUD 10K Long at 0.9047, SL 0.8980 (up from 0.8930), TP Open
Limit Buy Order:
Buy AUD 10K at 0.9000, SL 0.8900, TP 0.9090
See RBA interest rate and AUD Libor chart at
Australian Trade Balance came out earlier today. See chart at
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