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| USD/CHF – Downtrend Looks to Continue Posted: 22 Sep 2010 03:26 AM PDT
The Swiss franc continues to rally against the dollar as the pair moved past parity and today has taken out the 2009 low in a sustained downtrend that shows further signs of continuing. The swissie has been rallying, taking out multiple support levels on its way below the 1.0000 level. Signs of a trending market appear which may make for entry good opportunities on pullbacks in the price. Using multiple moving averages, a trader can identify the USD/CHF is in a sharp downtrend. The 200-day, 100-day, 50-day, 20-day, and 10-day simple moving averages are in a perfect order, appearing from top to bottom in this order. This is one indication of a trending market. Another sign of the trending environment is the ADX indicator which reads 33. Anything above an output of 25 indicates a currency pair that is in a strong trend. The moving averages and the ADX indicator are not shown on the chart below. Now that the trending environment has been identified, entry opportunities can be found on pullbacks to known resistance levels for the USD/CHF. Resistance is found at 1.0060, the low from September 1st. Resistance can also be located at 1.0000. This is a big round number and traders have a tendency to flock to big round numbers. The support at 0.9915, the 2009 low was taken out today and will now act as a resistance level. Short term price targets can be found by drawing a parallel channel line below the price action for the current downtrend. Today traders can look for the 0.9870 to come into play.
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| British Meeting Minutes Highlight Today’s FX Trading Posted: 22 Sep 2010 12:50 AM PDT
The British MPC meeting minutes will be the main event for a busy day in the FX markets; with US oil inventories figures dominating the New York trading session. Here's an outlook for the major events in today's trading. 08:30 GMT: GBP- MPC Meeting Minutes The last rate decision by the Monetary Policy Committee didn't bring any news – the rate remained at 0.50%. But inflation refuses to fully return into the 1-3% target. It will be interesting to see if there's still one member, Andrew Sentance that wants a rate hike. If others join in his concern of high inflation and vote for a rate increase, the GBP/USD could rise above the short term high of 1.5730. 13:00 GMT: EUR- Belgium NBB Business Climate This wide survey of 6000 businesses has improved in recent months but remains negative, meaning that the business conditions are expected to worsen. The previous output was -5.1 points. The survey will probably edge up, but still remain in negative territory at -5.0. EUR/USD support rests 1.3160. Resistance is found at the height of the June to August bullish move at 1.3333. 14:30 GMT: USD – Crude Oil Inventories This data influences the price of petroleum products which affects inflation, but also impacts growth as many industries rely on oil to produce goods. Oil prices might decline to $74.30 before a government report that may show U.S. refineries operated at their lowest rate in five months, signaling less demand for crude to process into fuels. |
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