The Swissy and Yen continue to Fall against the Buck

EUR/USD

The Euro continued to range today as it moved down to its 200 SMA and quickly bounced back up to its 100 SMA. The 100 and 200 SMA have been providing a nice upper and lower bound for the Euro’s range and technicals indicate that we may continue to see the pair range. 4hr stochastics have hooked down while daily stochastics are trending up. Currently the pair is trading around 4686 and I would watch for a short term drop to around 4660 followed by a bounce back up towards 4700.

GBP/USD

Well the support at 2.0365 held pretty good as the Cable was only able to drop to around 2.0350 before bouncing back up. The Cable has skyrocketed since then and is now trading at around 2.0464. Both 4hr and daily stochastics are trending up which indicates a good sign of a rally, at least in the short term. I would look for the Cable to continue up to its 100 SMA on the 4hr chart at around 2.0525.

USD/CHF

Well the Swissy dropped down but it only made it to its 200 SMA before bouncing back up to as high as 1400 and then finally setltling around 1370. The pair hit resistance at its 50 EMA on the daily chart at 1400 and has since dropped about 30 pips. Daily stochastics have been in overbought territory for several days now and I feel that the bullish pressure will not be able to sustain itself. The pair may hover flat or even rise slightly in the short term, but I would look for the pair to drop down to 1300 by the end of tomorrow.

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 :
  • 3:30am EDT- CHF Interest Rate Statement
  • 6:00am EDT– CBI Industrial Trends Orders
  • 8:30am EDTRetail Sales; PPI

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