Forex Tips & Daily Analysis

Economical News

USD

Amidst overwhelming pressure, the greenback gained some ground on what has been a tumultuous fall against other major currencies. The Fed has done its best to curb any further down trends, but with rising concerns in the US economy it is uncertain if anything short of a major announcement can change things. Unfortunately, much speculation seems to tend toward the notion that a credit crunch similar to the one from August will occur forcing the greenback down again.

The weekend's G-7 talks, produced responses from finance ministers and members of the central banks that called for no action to be taken against the plummeting greenback. As a result, investors changed sentiment regarding how far and how fast the greenback was supposed to fall. The USD managed its biggest rally against the EUR since 2005 as investors began to ponder whether or not a turn was in place.

US Treasury Secretary Henry Paulson will speak to today (12:30 GMT) at the US-China Relations Conference in Washington D.C. The speech will focus on economic relations with China and should not have a significant effect on the greenback's movement. As the only scheduled US news event on the calendar today, it will be intriguing to see if the greenback continues to strengthen after yesterday's push.

EUR

The EUR had a volatile day yesterday, having to cope with movement from the US and JPY. It managed to hit all-time highs against the greenback at 1.4348 before tailing off at the day's end to as low as 1.4133. Monday's economic calendar was empty regarding Eurozone news and left the EUR in the hands of global news events.

G-7 participants avoided statements that would touch upon the appreciating EUR. The undeniable strength of the EUR has kept European finance ministers and the ECB quiet about changes in economic policy.

ECB President Trichet has tried to echo sentiment that the greenback will find its way back to normal ground, which is proving difficult amidst rising suspicions of the problems in the US economy. However the resilient EUR is now beginning to come under pressure after the recent string of negative Eurozone economic data coupled with a slight shift of investor sentiment. It seems that the EUR bullish rampage is beginning to lose steam and may setup a sharp reversal.

JPY

The JPY has been in the middle of a whirlwind of news events regarding the volatile movement of the greenback. After trading at six week highs against the greenback, the JPY slowly dropped as was assumed it would. Due to unchanged interest rates it was only a matter of time before a sell-off of the JPY occurred. Agreeing with that sentiment, the G-7 gave the go ahead on selling the JPY to ease its demand within the currencies market. Carry trades tailed off especially, due to growing concern in the currency's volatility versus the greenback. The JPY was trading around the 113.50 against the greenback before the G7 meeting and then it slipped to the 114.48 level. The JPY has been on a strong uptrend of late as a result of the risk averse sentiment among investors which has caused a carry trade unwind. However it seems that the negative greenback sentiment may be on the brink of reversing, so this may halt the bullish JPY momentum.

Technical Analysis

EUR/USD

A rising wedge is establishing on the 4 hour chart imply on a bearish trend which may occur tomorrow .

Today , Slow stochastic and RSI have a positive slope suggesting the uptrend has much room left to go.

The upcoming bullish trend is expected to test the 1.4250 level, and in case of a breach we expect this pair to test the 1.4300 resistance level.

Today going long seems to be preferable.

GBP/USD

An upcoming bullish trend is expected when daily indicators (Slow Stochastic ,Momentum and RSI ) have a positive slope .

First target price is at 2.0400, if a breakout will take place, next barrier is located at 2.0473.

Going long seems to be preferable.

USD/JPY

A 5 Eliot waves structure is establishing on the 1 hour chart offering this pair to consolidate at 114.00 - 114.20 later today.

However in the next 3 hours we may see a slight strengthening of the greenback before the reversal will take place.

USD/CHF

The volatility has decreased and the USD\CHF is in a bearish configuration. Dovish moves without trend, and swings around exponential moving averages (EMA 50 and 100). Bollinger bands have tightened. 1H, 4H Elliott pattern implies a continuation of the bearish pressure.The target is expected at 1.1650 so going short seems to be preferable today.

Wild Card

GOLD

Gold broke the 657.90 resistance level. Gold is in an uptrend supported by 1H exponential moving averages. The volatility is low. Bollinger bands have tightened. Today, we should expect to see a bullish configuration. 1H, 4H Elliott pattern implies that the Gold should gather momentum also today. The target is expected at 659.00 and forex traders may find several opportunities for taking profits today.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.4275	2.0525	115.20	1.1847	0.9000	0.7052
	1.4250	2.0479	114.93	1.1823	0.8978	0.7025
	1.4230	2.0455	114.70	1.1800	0.8955	0.7000
Support	1.4150	2.0300	114.05	1.1708	0.8850	0.6930
	1.4125	2.0280	113.87	1.1684	0.8834	0.6910
	1.4100	2.0250	113.55	1.1654	0.8800	0.6885

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2007-10-23	10:00	GBP	CBI Industrial Trends Orders		6
		CBI Industrial Trends Orders The Confederation of British Industry (CBI) Industrial Trends Orders measures the value of new purchase orders placed with domestic manufacturers. A rising trend has a positive effect on the nation's currency. A busy manufacturing industry is a positive sign that the economy is expanding, and this survey points to how busy manufacturers will be in the months to come as they work to fill new orders.
2007-10-23	12:30	CAD	Retail Sales	m/m	-0.8%	0.5%
		Retail Sales Measures the value of sales at the retail level. A rising trend has a positive effect on the nation's currency because Retail Sales make up a large portion of consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises.
2007-10-23	12:30	CAD	Core Retail Sales	m/m	-0.3%	0.3%
		Core Retail Sales Derivative of Retail Sales that excludes the Automobile Sales component. Automobile Sales make up roughly 25% of Retail Sales, but they can be very volatile from month to month and can distort the picture. Retail Sales with the exclusion of this volatile component is thought to be a better indicator of the underlying trend in consumer spending.
2007-10-23	12:30	USD	Treasury Secretary Paulson Speaks
		Treasury Secretary Paulson Speaks US Treasury Secretary Henry Paulson will hold a press conference with French Finance Minister Christine Lagarde, in Paris.
2007-10-23	12:45	EUR	ECB President Trichet Speaks
		ECB President Trichet Speaks NULL