Wednesday June 25, 2008 - 12:24:11 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day - Evening - 25-June-2008....1220 GMT
EURO, JAP YEN and EURO-YEN
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Our comments on Dollar-Swiss, Sterling Pound and Australian Dollar are given below
With the Federal Funds Rate expected to remain unchanged later today all eyes are now on the FOMC Statement. It is a wide known fact that the market is expecting a hawkish statement from Bernanke. However, the state of the economy is not such that he would be able to please the markets in the desired way. If he gives in to the fear of low growth over the inflationary concerns, by not hinting at future interest rate hikes, the markets may bash up dollar black and blue once again after a period of close two months of steady Dollar. We mention this as the FOMC has repeatedly said they expect inflation "to moderate in coming quarters" and if that language is retained, the market would take it as a sign that rate increases will not happen no matter how hawkish other statements may appear to be.
Cable has had a steady rally in the day and is inching towards the important Resistance near 1.9770. The Resistance is expected to hold and a fall towards 1.9675 is likely. However, a break of 1.9770 would give a rise to the possibility of a fresh rise towards 2.00 later in the week.
Swissy trades well within the limits of the range and continues to be directionless within 1.0300-1.0550. A close above 1.0500 is expected to bring further strength to rally towards 1.07. Interim Supports are at 1.0375 and 1.0350, while 1.0472 and 1.0500 are potent Resistances.
Aussie has been facing constant Resistance on a rise to 0.9580-90 and has come off since to 0.9550, where it is getting Support. It is expected to break past this small range on the release of the US Durable Goods. A break above would bring 0.9650 in to the picture, while a break below could lead to a test of 0.9500-0.9450.
Long AUD 10K at 0.9550, SL 0.9485, TP 0.9620
Limit Buy Order:
Buy AUD 10K at 0.9510, SL 0.9480, TP 0.9620
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