Monday September 3, 2007 - 13:57:32 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day - Evening - 03-Sep-2007....1156 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 @ 1.2090/5...Near Range Resistance
R: 1.2100 / 1.2155
S: 1.2040 / 1.2000-1990
USD-CHF is in a sideways trend and has more of less traded within a range of 1.1950-2125 for over two weeks now, except for few brief intraday dips to 1.1960. This range could remain valid through the week. If there is a move above 1.2125 on a daily close basis, we could see a test of 1.2203, the 200-DMA. On the downside a break below 1.1960 on a daily close basis is required to see a larger fall. A dip towards 1.2000-1990 could be used to buy the pair in the week.
For today the Resistance is at 1.2100-25 and at 1.2155, the statistically projected Max High for the day. On the downside the Support is at 1.2040 and 1.1991, the statistically projected Max Low for the day. We would like to buy a dip.
GBP-USD @ 2.0165/70...Uptrend. Can buy dip
R: 2.0183 / 2.0213 / 2.0249 / 2.0282
S: 2.0142-28 / 2.0083 / 2.0041-31 / 1.9960
The Pound had fallen and closed below the 20-week MA for the week ended 17-Aug. However, it has closed above the 20-week MA in the two weeks that have followed. This is a very bullish signal. The charts also show a trendline Support near 2.0083 on a line joining the Lows at 1.9650 (June-07) and 1.7252 (Apr-06) on the Weekly Candles. This trendline had been broken in the mid-August plunge, but the market trading above it again. Technically, therefore, GBPUSD appears to be bullish. The EUR-GBP rate also seems to be moving sideways and since we are bullish EURUSD, we have to be bullish GBP-USD as well.
There is a small point of concern. The Bank of England meeting is scheduled for this Thursday (please click on http://www.kshitij.com/utilities/funcharts/ukboe.shtml). The market consensus is that rates will remain on hold. The GBP Libor is trading far higher than the BOE rates. At the same time, however, the UK CPI has been falling for the past few months (please click on http://www.kshitij.com/utilities/funcharts/ukcpi.shtml). As such, could it be that the BOE may be dovish, even if they do not raise rates this time.
Taking both of the above together, there could be chances of a dip towards 2.0085, possibly even 2.0050 in the early part of the week, giving a chance to buy on dip.
In case of an immediate rise past 2.0185 today, look for a test of 2.0240 over the rest of today-tomorrow.
Not placing any trade immediately. Will be looking to square a further part of the GBP Put Option we had entered into 19-July.
AUD-USD @ 0.8212/16...Resistance near 0.8245-50
R: 0.8240-50 / 0.8298
S: 0.8170 / 0.8146-40
The overall trend is bearish while the Aussie trades below 0.8260-90.
Last week, AUD-USD was very choppy, moving in a different direction on each day. It remained below 0.8240-50 on the upside, which would be an important Resistance this week as well. A move above that may lead to a rally towards 0.8330. On the downside it is important to note that last week, inspite of intraday whipsaw moves, AUD-USD held above itâ€™s 200-MA of 0.8146 on a closing basis. This indicates that a close below this is required to see the current overall bearish bias gathering fresh strength. For the first part of the week, the pair could be indecisive between 0.8150 and 0.8240.
For today the Support for the pair is at 0.8170 and 0.8146, the 200-DMA. The Resistance is at 0.8240-50 (already tested during the day) and then at 0.8298, the statistically projected Max High for the day.
RBA meets this week on Wednesday, where they are expected to hold rates. See charts at
Australian Labor Force is out on Thursday. See chart at
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