Dollar Looking Good!

EUR/USD

The Euro continued to move in its range between its 100 and 200 SMA on the 4hr chart early in the day, but it finally broke through towards the end. The pair broke through its 200 SMA at around 4667 and moved all the way down to 4600. 4hr stochastics are trending down while daily stochastics have crossed down. All signs point towards a continuing drop and I would look for the pair to fall down to 4550.

GBP/USD

Early in the day, the Cable moved up like I thought it would and hit its 100 SMA on the 4hr chart. Since then, the pair has reversed and has dropped below 2.0400 at around 2.0370. 4hr stochastics are trending down and daily stochastics have crossed down which indicates more bearish movement. Look for the Cable to continue dropping all the way down to the 2.0300 mark.

USD/CHF

Like the Cable, the Swissy hit my expected target as it dropped down to 1300 early today. However, since then the pair has skyrocketed and has breached the 1400 mark and peaking at 1450. Both 4hr and daily stochastics are trending up, but daily stochastics are in overbought territory so I’m not sure how much upward movement we’ll see. Currently the pair is trading around 1430 and I would expect it to rise back up to its new resistance at 1450.

USD/JPY

The Dollar ended up dropping to 111.00 like I thought it would, but rose up sharply and hit its 50 EMA resistance on the daily chart at around 112.30. The bearish hidden divergence on the daily chart is now fully formed and I would look for the pair to fall back down to the 111.00 mark sometime tomorrow. I would wait first however because 4hr stochastics are still trending up and the price could continue to rise slightly or stay flat for the next 10 hours or so.

 

I’m not really big into fundamentals but I feel that they are important to discuss. In this section I will be posting fundamental tidbits that I find interesting from various sources. If you find an article that you think would benefit everyone, please email me (Big Pippin) with your username, the article, and a link to where members can read the entire article.

Now onto the Fundamentals:
  • Fed Looks to End Credit Crunch
    • The Fed and other global central banks announce a new auction designed to let beleaguered financial institutions access more cash.
    • In essence, the Fed is giving beleaguered banks the opportunity to access funds it might need for year’s end without having to borrow money directly from the Fed at the discount rate of 4.75 percent.
    • The Fed added that it was coordinating with the Bank of Canada, European Central Bank, Bank of England and Swiss National Bank on the auction process in order to "address elevated pressures in short-term funding markets."
  • Fed Forecasts Slower Growth and More Out of Work Next Year
    • The housing collapse and credit crisis will slow economic growth and nudge up unemployment next year, the Federal Reserve said Tuesday in a first-of-its-kind forecast that some economists believe will lead to interest rate cuts early in 2008.
  • Bernanke Sees Slower US Growth
    • Federal Reserve Chairman Ben Bernanke said Thursday that a host of economic problems, including the severe housing slump, will cause business growth to slow noticeably in coming months. Bernanke told Congress’ Joint Economic Committee that the central bank is watching developments closely, but gave no signal that it’s prepared at the current time to cut interest rates even further. He stressed that the central bank was keeping all options open, saying the Fed would be closely watching economic growth and the threat of inflation.
  • "Model Behavior"
    • Super Model Gisele Bundchen has decided that she wants to remain the world’s richest model by insisting that she be paid in almost any currency but the U.S. dollar! OK… Now the dollar has been officially dissed! Sure guys like Rogers, Buffett, Gross, Butler, Wiggin, and Bonner have dissed the dollar because of the fundamentals… But when a super model decides to side with us, well then we’ve got ourselves what I’ll call… "Model Behavior"!\
News events to watch for tomorrow :

For a list of all of tomorrow’s news events, check out our Forex Calendar