Rethink Foreign Exchange

The new highs the Greenback reached yesterday in the majors are at long-term resistance levels now. We expect these levels to hold in the days to come, giving the USD time to digest its new surge. The major pairs showed some of the correction moves in early European trading already, reflecting the overbought condition of the U.S. currency. We expect the sideways market to continue today, with trading ranges offering enough room for further downward corrections for the USD, as described in

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USDCHF is testing 1.1416 previous high resistance. Further rise could be seen to 1.1800 zone after consolidation, and a break of 1.1416 will confirm such case. Initial support is at 1.1055 and followed by the up trend line from 1.0010 to 1.0693, as long as 1.1055 support holds, we’d expect up trend to continue. For long term analysis, USDCHF is in long term bullish movement. Further rise is still possible to 1.2000 zone after consolidation.

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EURUSD: EUR pushed through and closed below its strong YTD support at 1.3882 Thursday testing a low of 1.3747 before ending the session at 1.3804.While maintaining its current momentum and trading below its invalidated support, weakness is expected towards another key support located at its April’07 high at 1.3682 with a cut through there opening the door for further lower prices towards its Dec’04 high/August’07 low at 1.3366/61.We expect the pair to take a breather after the latter level is

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. Bias:        While 1.1340 caps I feel a pullback below 1.1290 will extend losses to 1.1227 and 1.1185 at least

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Markets have not been so nervous since a very long time. Volatility on many currencies increased to over 20% during one week! On Tuesday, the American Congress rejected Paulson’s plan, which was designed to lift American banks from the crisis. The Congress did not like the idea to use public money ($700 billion) in order to cure the current situation. On Thursday though, the re-designed plan was accepted by the Senate. Everybody is holding their breath to see if it is going to work and if the

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Despite improved growth the Canadian dollar fell over 500 points against the dollar as global growth declines. The anticipated decline in demand for raw materials has led to commodity prices dropping, which is expected to weigh on the Canadian economy.

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Action Insight Weekly Review and Outlook Bailout Plan Approved but Investors Unconvinced, Risk Aversion Dominates After a week of drama, the $700b bailout plan was finally approved by House on Friday. With Senate already approve the modified plan on Wednesday, US President Bush signed off the plan to ease the credit crunch that’s now “threatening” the US economy. However, the markets are rather not convinced that this is the solution. Dow ended up 7.3%% lower to close the week. The news was

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The focus in Australian Dollar trading falls squarely on the Reserve Bank next week, with expectations calling for Glenn Stevens and company to reduce borrowing costs by 50 basis points.

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The NFP came out much worse than expected on Friday, (Oct 3rd : Actual -159 K vs Forecast -85 K) while U.S. unemployment rate reminded at 6.1 % the worst last 5 years. Ahead of the vote for the Bailout plan, the market reactions seemed limited. Well, the U.S. Job data might have been “not so bad” as some analysts expected. we have been seeing these turbulent times that we have never experienced before. Fannie Mae,Lehman Brothers, AIG, Merrill Lynch, Washington Mutual. These big names have

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The downturn in the global financial market paired with fading risk sentiments has triggered bearish price action for the New Zealand dollar, but mounting hopes for the U.S. bailout package has certainly helped to calm fears, and led the high-yielding currency to bounce back at the end of the trading week.

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