Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Volatility Plagues Forex Markets Ahead of Interest Rate Decisions

Currencies / Forex Trading Feb 05, 2009 - 04:45 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleContinued volatility plagued the majors the past 24 hours as the USD continued to consolidate gains earned overnight although signs of topping continue. Overnight news as well as US data this morning failed to extend US gains past early highs seen in New York after the release of ADP private payrolls estimates. Showing another large drop projecting a dip in NFP on Friday, ADP came in at -553K. Although a negative number it was seen as an improvement over December’s numbers; USD got a slight boost on the news but GBP and EURO reversed;


EURO making New York highs above the 1.2900 handle at 1.2930 area and GBP making a daily high at 1.4580. Both pairs settled back on the day but did not make lows although EURO dropped all the way back to the 1.2820 area before regaining the 1.2870 area late in the day. High volatility found stops both ways in EURO and GBP as both rates suffered large swings in thinner volumes through the day but held firm into the close. Low prints in EURO at 1.2812 and in GBP at 1.4323 were on technical support suggesting that yesterday’s rally has more to go after both rates held support. Cross-spreaders in both pairs added to the volatility with main interest in Yen.

USD/JPY dropped to a low print at 88.81 but rallied later in the day for new highs at 89.79 before finishing mid range around the 89.30 area; dips are being bought and rallies sold suggesting more coiling before a large move in one direction; traders continue to suggest that a short-covering rally is due. USD/CHF rallied off overnight lows for a high print at 1.1639 before dropping back under the 1.1600 handle; the rate has to close below the 1.1580 area to suggest another selling wick and lower potential in my view.

USD/CAD fell to a low print at 1.2224 as the other pairs rallied to their highs but recovered one full handle to finish around the 1.2320 area into the close. Traders note that CAD demand related to M&A activity may have been behind the move after the London fix. In my view, today’s volatility in the majors is to be expected as the USD continues to sketch out a top. I think the

USD/JPY languishing around the 88.10/20 area before rallying to new highs intraday suggests that late shorts are getting nervous. Today’s drop in equities had no impact on the rate which also suggests that the rate is about ready to rally. Look for the USD to continue sideways with a lower bias into the next two days of data with the main focus NFP on Friday. BOE and ECB meetings with rate announcements due tomorrow with no changes expected but rhetoric to be closely watched during the press conferences.

GBP/USD Daily

Resistance 3: 1.4650, Resistance 2: 1.4620, Resistance 1: 1.4580
Latest New York: 1.4460, Support 1: 1.4320, Support 2: 1.4250/60, Support 3: 1.4200

Comments

Rate reverses overnight but not as much as other pairs; cross-spreaders on the offer. Traders note stops and active buying above the 1.4320 area and the rate recovers the 1.4400 handle into New York. Any correction a buying opportunity now as the rate begins to squeeze shorts. 23 year lows are very likely to hold on any break. Light stops seen on the move under 1.4380 with likely active selling dropping into lows overnight but the rate recovers in New York suggesting the bulls are in control. Two-way action continues suggesting that shorts are aggressively adding and longs are trying to find a bottom. Rate trading on technical’s now. Spillover from EURO likely but modest. A short-covering rally is increasingly likely now. Late sellers likely in or hurting.

Data due Thursday: All times EASTERN (-5 GMT)
5th-6th GBP Halifax HPI m/m
Tentative GBP MPC Rate Statement
7:00am GBP Official Bank Rate

EUR USD Daily

Resistance 3: 1.320/30, Resistance 2: 1.3150, Resistance 1: 1.3080
Latest New York: 1.2854, Support 1: 1.2820, Support 2: 1.2750, Support 3: 1.2700

Comments

Rate drops hard on liquidation, stops, and new selling as aggressive sellers try to cap above key 1.3030 area; drop sees large names on the bid suggesting the dip is a buy op. Aggressive traders can ADD to open longs under the 1.2850 area. Follows GBP in two-way action and rally in GBP took EURO with it for highs in New York at 1.2930 area. Cross-spreaders likely pressure as crosses are unwound. Two-way action overnight in light volume as stops get triggered under 1.2850 area and below but sellers run out on support at the 1.2800 handle again. Close back above 1.3030 argues for another test of the 1.3300 area weekly highs. Bulls are still attempting to find a bottom. 50 bar MA failed now likely to offer resistance and a close above suggests the bottom will be in. Technical levels around the 1.3300 area now likely to offer resistance so expect two-way action and consolidation.

Data due Thursday: All times EASTERN (-5 GMT)
5:00am EUR Italian Prelim CPI m/m
6:00am EUR German Factory Orders m/m
7:45am EUR Minimum Bid Rate
8:30am EUR ECB Press Conference

Join us for the Afternoon US Dollar Wrap-Up daily at 3:15 pm Central/Chicago time (GMT -6)

Analysis by: http://www.Forexpros.com - Written by Jason Alan Jankovsky

Forexpros offers the most definitive Forex portal on the web. It contains industry leading market analysis, up-to-the minute news and advanced trading
tools which provides brokers, traders and everyone involved in the financial market with an all-round guide to Forex.

Copyright © 2009 by ForexPros.com All rights reserved.

Disclaimer: Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

ForexPros Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

DBEDWARDS
06 Feb 09, 20:08
USD/CHF

Sirs:

I very much enjoy your currency foerecasts as they are timely and of a technical nature. As a market timer myself,

may I suggest that the USD/CHF (which I trade personally)

will sell below your 115.80 threshold this coming week

(February 9 - 13). I believe a low of 110.80 is possible.

However, I suspect if this level is attained, the USD would

rally for another test of the recent high of 117.43 (cash

market). Any comments? Continued success for THE MARKET ORACLE.

Sincerely,

DBE

San Francisco, USA


moneyads4u
07 Feb 09, 03:16
GBP/USD

Looks like inverted head and shoulder on monthly chart already commenced onward and I belive a further up for consolidations on GBP/USD from 23rd year Low at 1.3503 will hold for 2 months. Anyway if next week candle fail to break 2009 years high at 1.5372, candle will again test the 1.4050 Support to test this year low at 1.3503 area.

Need your firmly comments Sir.


Desmond Farrelly
08 Feb 09, 14:42
GBP Soon to Plummet in Value

I believe the rally on the Euro as well as the associated rise in the staying power of the British pound is shortlived indeed, I would get out of sterling as soon as possible, hedge my funds with Euro's and wait it out. Just my 2 cents worth of thought.


Voice From the Tomb
20 Feb 09, 14:13
Week of February 23, 2009/ USD/CHF forecast

Although my comments of 9 February proved to be premature,

today the Swiss has broached the 1.1580 support level on a closing weekly basis. With New York gold hitting the one-thousand USD level, the Dow Jones Averages in disaray, and the US federal government printing dollars as if there were no tommorrow, NOW is the time to SELL USD/CHF. I still insist a low of 110 or even 109 for cash is likely. I believe Monday, 23 February to be a supreme SELLING opportunity.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules