Wednesday October 19, 2005 - 06:21:02 GMT
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Tricom Futures and Foreign Exchange -
Forex: The Euro's on the edge of an abyss
The US dollar was firmer against major currencies in midday trade on fresh expectations for further US rate hikes in the wake of new economic data showing a sharp uptick in inflation. In addition strong capital inflows into the US in August further underpinned the greenback's strength.
While dollar's underlying bullish tone remains intact, the US unit is likely to undergo periodic bouts of profit-taking, as the market awaits fresh trading leads.
The USD bullish tone remains, even at these heady heights. While we can expect small pullbacks, the market is looking for a retest of the area under 1.1900 in the EUR/USD , and above 1.3100 in USD/CHF. Today's Beige Book will be looked at by the market for further evidence of the Fed's thoughts on the economy and the possibilities of further rate rises this year.
Aside from this, the market will be largely rangebound, following yesterday's large moves, and the fact that many accounts would have been wounded, and are now waiting for some sort of direction before re-entering the market.
Today’s Economic Releases:
UK: BOE Minutes
US: Housing Starts
US: Beige Book
Today's Top Trades
- Sell EUR/USD around 1.1940-50, with stops above 1.1980
- Sell GBP/USD around 1.7510, with stops above 1.7550
For more ideas send me an email, email@example.com
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