Monday September 10, 2007 - 11:40:48 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day - Evening - 10-Sep-2007....1125 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 @ 1.1869/74.....SNB Meeting this week
R: 1.1900 / 1.1940-51
S: 1.1850 / 1.1820
USD-CHF closed below 1.2000 last week, only the fifth such occasion since May 2005. The pair has had a substantial bounce (+200 pip) on each of the last four closes below 1.2000. As such, the big question is, will this happen for the fifth time as well?
It might not. The chances of a bounce this time are the remote as the SNB, which meets this week is expected to hike interest rates by 25 basis points. On the other hand, the FED is expected to cut rates next week and this reduces the â€ścarryâ€ť, one of the fundamental drivers for the pair. The surprise would be if the SNB does not actually raises rates, and this could lead to some buying in the Pair.
However, USD-CHF needs to move beyond 1.2000 on a weekly close basis to indicate a possible bounce. The outlook is bearish this week and a further drop towards the 2007 Low of 1.1816 (06-Aug) is likely. Below this the Support is at 1.1750.
For today the Support is at 1.1850 (already tested once) and 1.1820. On the upside the Resistances are at 1.1900 and 1.1940, the statistically projected Max High for the day. The pair could be sold on a rally to 1.1940, with stop above 1.2000 targeting 1.1750.
SNB Meeting on Thursday. See chart at
GBP-USD @ 2.0307/12.........Buy a dip
R: 2.0340 / 2.0380
S: 2.0240 / 2.0200 / 2.0251
GBP-USD had a modest rally last week. Importantly we continued to see buying Support at 2.0140, even after the moderately dovish BOE statement. 2.0140 is now an important Support this week. While it holds, the pair could head up towards 2.0450, possibly higher, later this week. A break through 2.0140 could indicate that a fall towards 2.0000 is underway. The pair could be purchased on a dip while above 2.0140 on a daily close basis.
For today the interim Support is at 2.0240. Below this the Support is at 2.0200. The statistically projected Max Low for the day is at 2.0151. On the upside the Resistance is at 2.0340 and 2.0380. The bias for the pair is bullish and a dip (if seen) towards 2.0170 should be used to buy with a stop below 2.0100 targeting 2.0400 this week.
UK Trade Balance is out tomorrow. See chart at
AUD-USD @ 0.8225/29....200-DMA at 0.8157
R: 0.8250 / 0.8280
S: 0.8180 / 0.8150
AUD-USD was largely mixed last week, trading between 0.8330 on the upside and 0.8154 on the downside. The low was near the 200-DMA of 0.8157 and that should be watched this week also. The pair has already seen a low of 0.8173 earlier today. We look for another ranged week within 0.8330 on the upside and 0.8150 on the downside, or possibly between 0.8100-8300. As such, a dip towards 0.8150-8100 could be used to buy with a Stop at 0.8080, targeting 0.8280.
For today the Support is at 0.8180 and 0.8150. On the upside the Resistances are at 0.8250 and 0.8280. The bias for the day is neutral. A sharp dip towards 0.8160 could be used to enter long with a stop below 0.8120 targeting 0.8330 in the week.
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