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  • Currency Pair Overview: Mixed Forex Moves 0 comments
    Nov 2, 2009 7:25 AM
    Overall, the dollar index found sellers during the Asian session, but this trend continued only for a limited period during European trade. This happened even though the commodity market appears to be trading on a strong uptrend which would normally support a weaker dollar. Moreover, the European trading hours were surrounded by positive news reports, including the excellent U.K. Manufacturing PMI numbers, but this did not stop the pound from moving lower, into the red. Ahead, investors prepare for the U.S. ISM Manufacturing PMI and Pending Home Sales reports, both scheduled at 10:00 EDT.

    TheLFBDollar Index Technical View:
    4 Hour Chart: Mixed. Main price points: 74.95, and 76.57. Looking for: Wave ii
     
    There has been a recent move up to test the 76.57 area, which could be the start of a red wave b) move. As such, another move lower with wave c) to come, near to 61.8% retracement area, is expected over the coming sessions, before blue the wave ii will be complete.
     
    Around this area traders may look for a long U.S. dollar move, and for a push through the 76.57 area. This wave count stays valid so long as the 74.95 area holds. Any break of this low will invalidate the wave count as wave two must not make a retrace of more than 100% of the wave one distance.

    The euro (Eur/Usd 1.4770) is currently trading 30 pips above Monday’s opening price as it is struggles to break above the 1.4780 intra-day resistance area. On the daily chart, the euro is trading at a comfortable distance between the 20 and the 50-day moving averages, which might act as a swing point in case the pair tries to break free. On Thursday, investors expect the ECB to keep the key interest rate at 1%.

    Trade Plan of the Day: TheLFB Trade Plan is Eur/Usd, one of the six that are available to members on the major pairs each day, plus four Jpy based cross pairs, plus S&P futures, oil, gold, and the dollar index.

    The pound (Gbp/Usd 1.6385) managed to advance a few pip during the Asian session, but started declining as soon as the London session opened. Moreover, the pound is still trading below the break-even line, even though the Manufacturing PMI report came in much better than expected, at two year highs. For now, the pound is trading just above the 100-day moving average area.

    The aussie (Aud/Usd 0.9050) was the most bullish pair during the overnight hours, as the market prepares for the interest rate decision during the upcoming Asian session. Currently, the market expects the RBA to raise 0.25%, for a second consecutive time to 3.50%. This report might spark volatility in the currency market.

    The cad (Usd/Cad 1.0800) is currently trading at a one month high, after the BoC complained about the strength of the Canadian dollar. Over the last two weeks of trading, the cad has been trading in an upward channel. A break below the support trend-line of this channel, in the 1.0700-1.0750 area, might signal a change in trend on the short term.

    The swissy (Usd/Chf 1.0220) is mirroring every move that the euro pulls, and still the Eur/Chf just broke below the 1.5100-benchmark level. It is thought that an exchange rate below this level might be harmful for the Swiss economy, which may force the SNB to intervene again.

    The yen (Usd/Jpy 90.20) opened the Sunday session with a bearish gap, that the market managed to fill very quickly. Since then, the yen had been moving up and down in a small range, without a clear direction. On Friday, the yen plunged at a strong pace during the U.S. session, after consumer data disappointed investors.

    Disclosure: No positions 
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