Forex Tips & Daily Analysis

Economical News

USD

The USD slipped yesterday, one day after its strongest rally against the EUR in more than a year, as investors braced for September data on the U.S. housing market that is expected to push interest rates lower. The dollar traded at $1.4263 per EUR after falling 0.6%.

Today, the USD may decline against the EUR for a second consecutive day ahead of the U.S. industrial report that is expected to show Existing Home Sales sank to its lowest point in 6 years. The Existing Home Sales reports has sparked fears that the data will point to a further deterioration in the housing market and increase the chances of more Federal Reserve interest rate cuts this year. U.S. interest rate futures are priced at roughly 85%, implying that there is a chance of a 0.25 point cut in the federal funds target rate to 4.50% at the end of the Oct. 30-31 policy meeting.

In addition to the Existing Home Sales, the U.S Crude Oil Inventories are also on tap today. There are no expectations for that indicator, while the previous month's figure stood at 1.8M. The USD is expected to trade at the $1.4240 to $1.4300 range today.

EUR

The Euro resumed its uptrend, despite the fact that Industrial New Orders from the Euro-zone were released slightly below estimates at 5.1%.

Yesterday, the EUR was up 0.4% against the USD and traded at $1.4240 level. The EUR was also up about 0.6% against the JPY, trading at 163.22 Yen, the biggest one-day percentage gain in a month.

Meanwhile, the high value of the European currency continues to be a burden on the European economy. European officials are concerned about the EUR rise against the USD, since it raises the price of exports to the United States and to China, as the Chinese have been managing their currency to keep it from appreciating quickly.

Looking ahead, Manufacturing PMI is anticipated to fall back slightly, while Services PMI is forecasted to be a bit more resilient. The ECB President Trichet will speak at 16:00 GMT, and any hawkish commentary will help maintain the Euro's bid tone.

JPY

The Japanese yen dropped against all 16 of the most-actively traded currencies yesterday as risk appetite led to higher equity markets around the world, thus dragging down the JPY. A rekindling of risk appetite put the JPY under pressure yesterday as firmer equity markets prompted some investors to move back into carry trades, where they buy securities in a high-yielding currency funded by borrowing in a low-yielding currency such as the JPY. The Japanese currency lost 0.76% against the EUR and 0.3% vs. the USD yesterday. The JPY traded at 163.70 per EUR and 114.78 per USD.

Today's relatively empty Japanese economic calendar left currency traders to react to movements in other financial markets. The movements in the U.S equity markets will continue to be a predominant driver of the Japanese Yen.

Technical Analysis

EUR/USD

A 1,2,3 wave structure is being established on the 4 Hour chart which suggests that this pair will test the 1.4178 Fibonacci level. If this level will breach than next target price is 1.4141, if not this pair is expected to test the 1.4264 resistance level.

GBP/USD

There is a mild bearish channel on the 4 Hour chart that may imply an upcoming bullish trend; however this trend might take place later this week when the first target price is located at 2.0575. In case of a breakout, the next barrier will be located at 2.0620.

USD/JPY

An upcoming bearish trend is expected when the 4 Hour MACD is crossing and the Slow Stochastic has a negative slope.

First support levels are located at 114.00 and second at 113.68.

Going short seems preferable.

USD/CHF

A bullish flag structure is being established on the 4 Hour chart, however the Slow Stochastic, Momentum and RSI are not supporting the trend .

Traders need to look for signs of future positions however there are no signs for today's direction.

Wild Card

Crude Oil

An upcoming bullish trend is expected as a reversal took place after it failed to break the 84.63 support level.

There is a falling wedge structure on the 4 H chart which only strengthens the assumption that a bullish trend will take place. forex traders have a good entry point to get into the the market and to leverage their profits.

Market Trend

	EUR/USD	GBP/USD	USD/JPY	USD/CHF	AUD/USD	EUR/GBP
Daily Trend
Weekly Trend
Resistance	1.4300	2.0579	115.13	1.1814	0.9059	0.7028
	1.4275	2.0542	114.88	1.1792	0.9030	0.7003
	1.4248	2.0518	114.53	1.1770	0.9005	0.6977
Support	1.4200	2.0477	114.08	1.1715	0.8962	0.6915
	1.4175	2.0451	113.82	1.1691	0.8935	0.6891
	1.4152	2.0420	113.57	1.1664	0.8908	0.6863

Indicators

Date	Time GMT	$€£¥	Event	Period	Prev.	Forecast	Imp
2007-10-24		EUR	ECB President Trichet Speaks
		ECB President Trichet Speaks NULL
2007-10-24	01:30	AUD	CPI	q/q	1.2%	0.9%
		CPI The Consumer Price Index (CPI) measures the rate of inflation (i.e., the rate of price changes) experienced by consumers when purchasing goods and services. A rising trend has a positive effect on the nation's currency. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 2%, they will respond by raising interest rates to bring prices down. Higher interest rates attract foreign investment, thus increasing demand for the nation's currency. CPI is one of the most closely watched indicators and will usually have a high impact upon release.
2007-10-24	14:00	USD	Existing Home Sales		5.50M	5.25M
		Existing Home Sales Measures the annualized number of existing homes sold in the previous month. Existing Home Sales make up a larger portion of the housing market than New Home Sales, and therefore are an important indicator of trends in the housing market. This indicator is published monthly by the National Association of Realtors.
2007-10-24	14:00	USD	Fed Governor Kroszner Speaks
		Fed Governor Kroszner Speaks NULL
2007-10-24	14:30	USD	Crude Oil Inventories		-	1.8M
		Crude Oil Inventories The Energy Information Administration's (EIA) Crude Oil Inventories measures the weekly increase in barrels of commercial crude oil held in inventory by US firms. The level of inventories influences the price of petroleum products, which can have an impact on inflation and other economic forces.