Wednesday March 23, 2005 - 10:25:00 GMT
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Forex Morning Meeting - European Session, 23/3/2005
Good morning everyone from FXstreet.com. The Crude oil closed around $55.60 yesterday, now confirming the bearish signals from indicators. In the US stock markets, the Dow Jones Industrial Average closed around 10.470, sliding further after the bearish signals triggered some days ago. The FED raised interest rates to 2.75% (+0.25%).
Forex Technicals at a glance
Euro/Usd: At the time of this writing, the pair is trading around the 1.3030 level. The weakness shown in previous sessions finally ended in a big sell-off after the FED decision was announced. Comments on the weakness of the single currency after unsuccessfully trying to break amd stay above the 1.34 level led to a series of warning signals alerting that the bullish momentum for the pair might have disappeared. Currently staying above the 61.8% retracement level of the previous upleg, the last and key level to hold if the pair wants to keep longs attractive. Moving averages are now starting to turn south, which doesn’t give much support either. Therefore, we might have a bearish channel acting in full force now, with the lower line of it around 1.26 today, so plenty of downside room, with premission of the fibo level and the 200-day simple moving average. A break above 1.3475 negates the view, quite far now.
Moving averages overview: EUR has its 200-day moving average today at 1.2754. Pair is trading below the 2 moving averages (20&50), though they still hold a bullish cross.
Indicators watch: Indicators watch-level 1 (signal generator): EUR Negative – no signal (flat). Indicators watch-level 2: EUR Neutral.
Gbp/Usd: At the time of this writing, the pair is trading around the 1.8790 level. Break of the 50-day moving average leaves the pair highly vulnerable for further weakness now. More than 200 pip decline and the moving averages turning south don’t support the bull view either. If we try to draw the fibo retracement lines for the previous upleg, we see that price action is now breaking the last support level. Next downside target is the 200-day simple moving average. Breaking of the 1.94 level negates the bearish technical view, far from it right now.
Moving averages overview: GBP has its 200-day moving average today at 1.8577. Pair is below both moving averages now.
Indicators watch: Indicators watch-level 1 (signal generator) : GBP Negative – no signal (flat). Indicators watch-level 2: GBP Neutral-Negative.
Usd/Chf: At the time of this writing, the pair is trading around the 1.1940 level. Breaking fibo levels along the way in a very good upmove. Only the last 61.8% fibo level prevents it from the real attempt of the 200-day simple moving average. Moving averages turning north and look poised for a cross on the upside should the price action remain for 6-7 sessions. Again, USD/CHF is the leader for the greenback current move. It gave first warning signals earlier than other majors, and has proven itself to be the pair to watch for now. It also warned of the long USD move that was coincident with both usd/cad and nzd/usd weekly long USD signals. Therefore, what one can see now is that daily charts are beginning to move in the same direction as weeklies.
Moving averages overview: USD has its 200-day moving average today at 1.2076. Pair is above both moving averages now.
Indicators watch: Indicators watch-level 1 (signal generator): USD Positive - no signal – (flat). Indicators watch-level 2: USD Positive.
Eur/Gbp: At the time of this writing, the pair is trading around the 0.6935 level. Apart from the bullish cross from the moving averages, pair is stuck in a very narrow trading range and therefore not much more to comment on it right now.
Moving averages overview: pair has its 200-day moving average at 0.6862 today. Pair is on a bullish cross by the 2 moving averages now.
Indicators watch: Indicators watch-level 1 (signal generator): EUR Neutral. Indicators Wacth-level 2 : EUR Neutral-Negative.
Indicators watch-Level 1: Trend indicators Direction, providing some useful investment information.
Indicators watch-Level 2: Momentum Indicators Direction (working in pairs), providing current market sentiment for the instrument.
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