Major currencies remain trapped in range awaiting G20 next weekend Washington meeting
Forex News and Events:
The Dollar was little changed against the Euro on Monday after falling earlier in the session as news of a large economic stimulus package from China made some traders more willing to take on risk. Initial optimism quickly faded as US stocks surrendered early gains on concerns that China's plan may not be enough to help avert a global recession, helping the safe-haven Yen regain some strength versus the Dollar.
China launched an economic stimulus package on Sunday worth $600 billion in what could mark the start of a round of big spending or interest rate cuts to stave off a recession in many countries. Analysts said while the initiative from China was a step in the right direction, it was unlikely to provide an immediate fix to the struggling global economy.
Traders said trading volume was lower than usual in the afternoon as the US bonds and futures markets closed earlier ahead of Veterans Day holiday on Tuesday. Trading in US stocks and currencies will remain open during the holiday.
Growing speculation that the leaders of the Group of 20 nations will agree to make a concerted effort to shore up the global economy when they gather in Washington this weekend also injected some optimism into the market, analysts said. Currency markets remain jittery about a global recession, ensuring that any recovery in risk appetite remains tentative. Countries around the world have been slashing interest rates to buffer their economies against the negative impact of the global downturn, while many nations are mulling fiscal measures to essentially spend their way out of recession. Major currency pairs remain trapped in ranges and the foreign exchange market will continue to eye developments in the equity market for direction.
Yesterday, EurUsd was nearly flat at 1.2747, having jumped earlier to an intraday 1.2927. UsdJpy traded down 0.34% at 98, giving up earlier gains from 99.48 high. EurJpy was 0.47% lower at 124.91, having hit 128.43 intraday high. GbpJpy lost 0.57% at 153.22, retracing from earlier 157.55 high. GbpUsd was down by 0.24% at 1.5636. UsdChf rose 0.2% at 1.1792.
Today's Key Issues (time in GMT):
00:00 USD Veteran’s Day holiday
07:00 EUR October German Wholesale price index -1.5% vs -1.0% (mom)
07:00 EUR October German Wholesale price index 3.6% vs 4.2% (yoy)
08:30 SEK Q3 Capacity utilization -0.9% vs -0.8% (qoq)
08:30 SEK October CPI 0.2% vs 1% (mom)
08:30 SEK October CPI 4% vs 4.4% (yoy)
09:30 GBP September Trade Balance £-8b vs £-8.2b
09:30 GBP September Trade Balance non-EU £-5b vs £-5.16b
10:00 EUR November ZEW current conditions -45 vs -35.9
10:00 EUR November ZEW economic sentiment -62 vs -63
22:00 USD weekly ABC CCI 50 vs -48
The Risk Today:
EurUsd Market dropped as low as 1.2330 last week and sharply rebounded to 1.3298 high Thursday last week. This shows actual trading range 1.2330 – 1.3298. On the downside, renewed weakness will open the way down to trendline support 1.2208. Next long-term support holds 1.1640 November 2005 low. Further support holds 1.0739 September 2003 low. On the upside, only a return over 1.4000 (former trendline support) and 1.5000 will release actual pressure and may put key resistance 1.6000 into focus. Resistance holds 1.4002 former trendline support. Initial resistance holds 1.3769 14th October high.
GbpUsd Market hit 1.5265 low on 24th October and then recovered up to 1.6673 high last week. This holds trading range 1.5265 – 1.6673. Strong support holds 1.5279 Monday 24th October low. Deep following supports are 1.4560 trendline and 1.3682 March 2001 low. On the upside, strong resistance holds 1.6673 last weeks high ahead of 1.7144 (38.2% retracement of 2.0158 – 1.5265 3-month drop). Further resistance holds 1.7744 (50% retracement).
UsdJpy Market has now recovered up to 99.80 September-October trendline resistance following two weeks ago drop to 90.91 on Friday 24th October. On the upside, only a recovery over 103 upper trendline and 105 pivot point will put focus again on 108 and 110.67 15th August high. Initial resistance holds 99.48 yesterday high ahead of 100 pivot point. Staying in the current downtrend might open the way down to 79.70 April 1995 low.
UsdChf Market hit 1.1804 high yesterday. Further advance may open the way to 1.1895 October 2007 high and strong resistance. Strong resistance holds 1.1780. On the downside, renewed weakness below 1.1203 Friday low would undermine the current uptrend and reverse through 1.0692 22nd September low and down to 1.0500 and 1.0375. Such a move may look for 1.0013 15th July low in front of 0.9637 17th March low.
There is a risk of loss in futures, forex and options trading. There is risk of loss trading futures, forex and options online. Only trade with capital you can afford to lose. Past performance is not necessarily indicative of future results. All information has been obtained from sources, which are believed to be reliable, but accuracy and thoroughness cannot be guaranteed. Readers are solely responsible for how they use the information and for their results.
|Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)|