Monday November 27, 2006 - 12:22:08 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day - Evening - 27-Nov-2006...1217 GMT
EURO, JAP YEN and EURO-YEN
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Our comments on Dollar-Swiss, Sterling Pound and Australian Dollar are given below
$-Swiss @ 1.2084/89....Sell on rally
R: 1.2103-12 / 1.2130 / 1.2150
S: 1.2050 / 1.2022-18 / 1.1980
$-Swiss had a rally to a high of 1.2112 during the day but has once again fallen a bit, as the weekly bias remains bearish. The pair may head towards 1.1919 (Low of May-06) later on in the week. The weekly view for the pair remains valid while the pair is below 1.2260 on a daily close basis.
Intraday, on the downside, the Support is coming in at 1.2050 and then at 1.2018, which is near the statistically projected Max Low for the day of 1.2022. A break below these may target 1.1980. On the upside the Resistances are coming in at 1.2112 and then at 1.2130. Note the statistically projected Max High for the day is at 1.2103. The bias for the pair continues to be bearish currently. Expect to see selling on rallies.
Sell $25K at 1.2160, SL 1.2190, TP 1.2060
Cable @ 1.9363/68...Buy on dip
R: 1.9390 / 1.9416 / 1.9470
S: 1.9353 / 1.9310 / 1.9250
The Cable had a fall to a low of 1.9305 during the day, which resulted in our TSL at 1.9309 getting hit on the Long which was entered at 1.9290. The Cable has once again rallied subsequently, as the pair continues to show good buying on dips. While the pair trades above 1.9174 (daily closing), it may head up to test its Dec-2004 High of 1.9550 during this week or the next.
Intraday the Support on the downside is coming in at 1.9353 and near 1.9305, the Low seen during the day. A break below that (unexpected) may trigger a fall towards 1.9250. On the upside the Resistances are coming in at 1.9390 and then at 1.9416, the statistically projected Max High for the day. A move above these targets 1.9470, the high tested earlier today. The bias for the day is Bullish and dips to 1.9300 should be used to enter Long with Stop below 1.9250 as a 2-3 day trade for a TP near 1.9400. Note the SL is slightly bigger looking at the recent volatility in the pair.
Aussie @ 0.7776/80....Watching
R: 0.7822 / 0.7843
S: 0.7773 / 0.7760 / 0.7740
The Aussie had a sharp rally last week. Its Close at 0.7780 was the highest weekly close since Apr-05, surpassing the Sep-05 Weekly Closing High of 0.7733, but just below the May-06 High of 0.7793. Thereafter, the pair has moved up once again today morning to a high of 0.7820, just below the Apr-05 High of 0.7843.
A sustainable break above 0.7850 may result in an upmove towards the 2005 high of 0.7991 over the coming weeks. HOWEVER, it is to be seen whether the market want to break past 0.7850 immediately, given that the 0.7750-7850 region has been providing a Top since Apr-05. Assuming the market would like to take the Aussie up past 0.7850, it could, at least, consolidate a bit between 0.7850-7750 before doing so.
Intraday the Resistance now comes in at 0.7822, the statistically projected Max High on the daily. If that is crossed, there may be a move towards 0.7843. On the downside the Support is coming in at 0.7767, (held on first test during the day) the former high of 01-Nov-06 . On a break below that there may be a fall towards 0.7740. Note that the statistically projected Max Low for the day is at 0.7773.
Weâ€™d like to stay out and watch the market for a day or two, to see which way the wind is likely to blow going forward.
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