As indicated by the 4hr chart yesterday, the Euro did end up falling today. The pair made its way down to around 4613 before settling back up at around 4660. Daily stochastics are trending up and 4hr stochastics appear to be hooking back up although it hasn’t reached oversold territory yet. I have a feeling we’ll see the pair shoot back up to 4700 tomorrow but we could see the pair either hold or fall a little more before seeing the rise up.
The Cable continued its current downtrend and fell over 100 pips today as it dropped to around 9400. We’ve seen the cable fall about 300 pips over the past few days but once again it was unable to break 9350. which was a previous low that was made back on January 21st. Right now the charts still look confused. 4hr stochastics have crossed up in oversold territory which indicates a bounce off of 9350 and a move back up to around 9500. However, daily stochastics are trending down and indicates a move that could break 9350 and travel down to 9300. I’m still split on this pair and will continue to hold off until I get a better vibe!
Well my trade idea was a total bust yesterday as the Dollar decided to rise back up to 1000 against the Swissy today. Daily stochastics have hooked up after trending down the past few days which leads me to believe that we’ll see more rangebound movements in the short-medium term. On the 4hr chart, a triangle has formed and it looks as though we may see the pair range within the triangle before making another big breakout move. If you trade this pair, be careful and take quick profits if you can.
Once again we had another rangebound day for the USD/JPY as the pair continued to hover around the 108.00 mark. Right now both the 4hr and daily chart look pretty ugly and the indicators aren’t really giving anything solid. There’s not much else to say about the pair except that I would stay out unless you are really confident in trading small ranges!
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:
Euro Interest Rates about to Rise?
- And don’t look now, but Eurozone inflation is rising… Of course I told you it would, given oil prices, and that the European Central Bank (ECB) would have to drag its feet to cut interest rates… (I also tried to say that on CNBC, right?) Anyway, inflation for the 13-nations that make up the euro, rose 3.1% in November… Whoa Nellie! That’s way too high, given the ECB’s ceiling of 2%!
- The one thing to think about here is that should the ECB decide to raise rates, and the Fed decides to keep cutting rates (recall the discussion about the possibility of 50 BPS this month from the Fed) The euro would be enjoying a positive rate differential… You think the euro was popular as an offset currency to the dollar before? Wait till that happens (if it does of course!)
- Source: Chuck Butler: The Daily Pfennig, 01/08/08
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."
- Source: CNN Money
News events to watch for tomorrow :
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