So What’s New? Apparently nothing for the Dollar!

EUR/USD

Yes I know what you’re saying…"BP, you were totally wrong on your analysis yesterday!". I’m the first one to admit when I’m wrong, and boy was I ever wrong yesterday! So now you might be saying, "BP, isn’t it time you start going along with the crowd and short the Dollar?". My answer/question to that is, why be the same when you can stand out by doing something different? 🙂 The truth is, everyone knows I’m a technical guy, and right now the technicals are just making a bigger indication that we’ll see a reversal soon. The Euro moved up to 4700 today but dropped shortly after and is now hanging around 4650. That extended bearish divergence is still present on the 4hr chart. In fact, today’s extreme rally still produced a lower high on the stochastics indicator. 4hr and daily stochastics are also both in overbought territory and are trending down now. I’m sticking to my bearish ways and am going to look for this pair drop to at least 4600 tomorrow. What can I say? Old habits die hard!

GBP/USD

Just like the Euro, the Cable is also still showing strong indications of a drop (technically speaking). With today’s rally, there is a much clearer bearish divergence on the 4hr chart. Both 4hr and daily stochastics are trending down in overbought territory which means I’m still going to be a big bear on this pair. So wave your hands in the air like you just don’t care! Look for the Cable to drop from 2.1050 down to at least 2.1000.

USD/CHF

The Dollar also continued to drop hard against the Swissy today. The pair finally found support at right around 1250 and has since moved back above 1300 to around 1320. There is a clear bullish divergence on the 4hr chart and both 4hr and daily stochastics are trending up in oversold territory. Look for the pair to continue up towards the 1400 mark some time tomorrow.

USD/JPY

The Dollar dropped against the Yen today and fell to what seems like support at around 113.00. I’m still unsure about this pair as daily stochastics are still trending down, but 4hr stochastics are in oversold territory. The pair may rise to 113.50 but I’m not entirely confident about that idea.

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:
  • "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"!\
  • UK September retail sales saw the highest annual growth in 3 years:
    • The Office for National Statistics reported that retail sales in September rose 6.3 pct from a year ago, the highest rise since September 2004 and above analyst expectations for a 5.6 pct increase. In August sales rose 4.8 pct year-on-year, revised down from the earlier estimate of 4.9 pct.
News events to watch for tomorrow :
  • 7:00am EDT- BOE Interest Rate Statement
  • 8:30am EDT– ECB President, Trichet, speaks
  • 10:00am EDT– Fed Chairman, Bernanke, speaks

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