Wednesday October 5, 2005 - 05:27:59 GMT
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Tricom Futures and Foreign Exchange -
Forex: Beware, the wounded Euro!!!
The dollar slid against most rival currencies as market participants took profits after the US currency failed to sustain strong gains against both the yen and the euro despite comments from Federal Reserve officials supporting further increase in US interest rates to combat inflation.
But analysts expect the dollar to regain ground long-term on expectations the Fed will continue its rate hike strategy.
Overnight, Federal Reserve bank presidents kept up a steady drumbeat warning that higher inflation is the biggest threat to the economy from Hurricanes Katrina and Rita. A slowdown in growth is viewed as temporary, while higher prices need careful attention, the officials said in three separate speeches Tuesday
The short squeeze we have seen today in the EUR and GBP may well continue a little further, but i suspect the 1.1980 and 1.7650 areas may well cap any further upside today. On the downside, the EUR/USD has strong support around 1.1890, which co-incides with the neckline of a head and shoulders pattern on the weekly chart. I would sugggest selling EUR, and/or buying USD today, but with a tight stop, as the market maybe approaching a turning point in coming days.
Today’s Economic Releases:
Today's Top Trades
. Sell EUR/USD around 1.1965, with stops above 1.1995
. Buy EUR/JPY around 136.00, with stops under 135.60
For more ideas send me an email, [email protected]
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