Monday November 5, 2007 - 12:08:42 GMT
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FX Thoughts for the Day - www.fxthoughts.com
FX Thoughts for the day - Evening - 05-Nov-2007....1158 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 @ 1.1532/36....Bearish biased
R: 1.1570 / 1.1594
S: 1.1510-00 / 1.1475-79
USD-CHF is in a clear downtrend at the moment and is trading at its lowest level since Mar-2005. Now the big Support is at 1.1285, the low which was seen in Dec-04. However, that is NOT expected to be tested this week. This week the VERY IMPORTANT Support is expected at 1.1440-50, which falls on a trendline on the Weekly Candles joining the lows of 1.1816 (10-Aug) and 1.1625 (28-Sep). This Support needs to break in order to allow for any further falls.
However, in case the Support holds, there could be a reaction on the upside. That said, there needs to be a move above 1.1674 (last weekâ€™s high) to trigger any chances of a sustained recovery. While below 1.1674, there is likely to be strong selling on rallies.
For today the Support is at 1.1500 and then at 1.1479-75, the statistically projected Max Low for the day. On the upside the Resistance is at 1.1570 and then at 1.1594, the statistically projected Max High for the day. The pair is likely to face lots of selling on rallies.
GBP-USD @ 2.0817/21.....Buying currently
R: 2.0860 / 2.0900 / 2.0960
S: 2.0766 / 2.0747 / 2.0700
GBP-USD is correcting intraday, after the sharp rally seen last week. However, it still looks bullish biased and could target its important Resistance of 2.1050-55, on the trendline on the Weekly Candles joining the highs of 1.9028 (May-06) and 2.0657 (July-07). This trendline disregards the spike to 1.9849 in Dec-06. On the downside the Support for the week would come in at 2.0600. This week is a big week for GBP as the BOE is meeting on Thursday, and the UK Trade Balance is coming out on Friday. The bullishness in GBP is likely to persist in the week.
Immediately the Support is at 2.0766. Below this the Support is at 2.0747, the statistically projected Max Low for the day. We donâ€™t expect a break below the latter today. On the upside the immediate Resistance is at 2.0850 and then at 2.0900. The statistically projected Max High for the day is at 2.1012. The bias is bullish and a dip towards 2.0780-50 may be used to buy with stop below 2.0700 targeting 2.1000 in the week.
GBP-JPY is currently near its 200-Day MA of 237.38 and that is also expected to influence the GBP-USD. Should that 200-Day MA break on a daily basis, then it could pressurize the GBP-USD
See UK Libor and BOE Bank Rate chart at
See UK Trade Balance chart at
Market Trade (at the time of writing):
Buy GBP 10K at current level, SL 2.0730, TP 2.0980
AUD-USD @ 0.9173/78....Buy Dips
R: 0.9200 / 0.9244-50 / 0.9292
S: 0.9120 / 0.9092
AUD-USD had a sharp fall in the middle of last week, and with that it has most likely made a range of 0.9100 and 0.9347 within which trading could take place in the first part of this week. However, there could be bullishness returning in the later part, as the RBA is meeting on the 07-Nov where it is expected to hike rates by 25 bps. As such, a dip towards 0.9100 could be used to buy. A sustained break below 0.9100 (NOT expected at the moment) could lead to a decline towards 0.9000, which comes on a trendline on the Daily Candles joining the lows of 0.7674 (17-Aug) and 0.8751 (22-Oct).
For today the immediate Resistance is at 0.9200 and then at 0.9244-50 and a move above that may be difficult. The statistically projected Max High for the day is at 0.9292. Intraday, AUD seems to be headed towards 0.9120. Below this the big Support is at 0.9094, the statistically projected Max Low for the day is at 0.9087. We would like to buy a sharp dip.
Limit Buy Order:
Buy AUD 10K at 0.9120, SL 0.9070, TP 0.9300
See RBA Interest Rate and AUD Libor at
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