Wednesday November 3, 2010 - 12:01:43 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day : 03-Nov10-2010 - 1200 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 @ 0.9796/97 Short orders not triggred,stay out
A very quite a dollar-Swiss, range of 0.9760-9800. Even a much better than expected reading on retail sales was not enough to see the pair trade lower. Having broken the trendline, Dollar-Swiss will find it be a stiff resistance to break on a rally. Currently the trendline resistance is around 0.9870 and is rising by 20-25 pips every day. Support is around 0.9720 and then at 0.9650.
GBP-USD @ 1.6134/35...Time to encash profits on longs
As expected a good print of services sector PMI propells cable higher towards its rising wedge resistance around 1.6140-50. Cable has been the star performer amongst the majors and further gains could be capped. Now with cable at resistance, it is advisable to look to other majors or crosses for a short dolalr trade. PMI was 53.6 against expected 52.6.
Cable face resistance between 1.6140-50, with FOMC in a few hours it would be prudent not to follow cable even if cable breaks 1.6150. Cable has support at 1.6070-80 and then at 1.60. cable is safe as long as it trades above 1.5950.
AUD-USD @ 0.9987/89... Wait a little longer
R: 1.005 / 1.0150
S: 0.99-9880 / 0.9850.
On more failed attempt above 1, this time the the high was short of yesterday, at 1.004. Our view remains same as morning.
"Market waits for QE decision from FED as bulls keep their gun powder dry. In an event of a dollar bearish trade post FOMC, we expect Aussie Dollar to outperform its peers. RBA statement and action has been a major bull fodder, only thing standing between them and trades level above parity is tonight's FOMC. Minor trend remains up and only a break below 0.9880 will flip the bias to neutral. Traders can buy correction towards 0.99 in Aussie for a move above parity. Australian services sector survey was better than expected and showed expansion. "
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