[B] Economic News
USD [/B]
The fate of the greenback will continue to be questioned today, as the decision to cut interest rates by the Fed is imminent. Halloween (Wednesday October 31st) of all days looks to be the one that will see the US Federal Reserve make, what has become nothing short of an obvious move regarding the US economy. Though the dollar remained relatively unchanged yesterday, forex investors continue to expect the fall of the greenback.
Today will see the release of two key reports that are anticipated to add to the gloomy US economic picture. Firstly, the release of the S&P/ Case-Schiller National Home Price Index is expected to give negative results for the eighth month running. The report measures the changes in prices of single-family homes within 20 major metropolitan cities, and will most probably contribute to the falling trend of the greenback. One hour later at 2PM GMT, we will see the release of the Consumer Confidence report. Expectations are equally as disappointing; as the report is set to hit 11-month lows and solidify the Feds need to cut rates.
The past weeks have been historic, with the greenback hitting all-time lows against its European counterpart. While traders prepare for the Fed’s statement we shouldn’t expect any drastic changes in recent trends, as the greenback continues to suffer.
[B]EUR [/B]
The Euro faced some losses against the greenback yesterday, due in some part to the growing assumption that the European banks are set to report more losses. Mortgage defaults and other credit issues have dulled the European economy’s strength and snapped five straight days of gains against the greenback. Speculation surrounding the ECB raising interest rates is gaining steam, as inflation numbers continue to stay strong. Yesterday, German CPI numbers came back stronger than expected, strengthening the idea that rate hikes are still to come. The EUR/USD traded in and around the 1.4400 level yesterday, going no lower than 1.4375 Today the European economic calendar is relatively empty, with the release of the German Unemployment Rate as the only slated event. It is safe to say that most of the day’s movement with the EUR will be directly related to the aforementioned news in the US. As the US economy continues to disappoint, we can expect the EUR to stay strong and continue to prosper.
[B]JPY [/B]
The JPY fell yesterday as global stocks continued to rise. The JPY found itself being used to finance loans for traders interested in more volatile positions. Using the JPY for loans in such investments saw the Japanese currency fall just over 0.5% against the EUR to 165.40. The JPY saw its prices fall against fifteen of the most regularly traded currencies on the market.
Yesterday, the release of Japanese Household Spending numbers came back higher than excepted. Today, Manufacturing PMI is said to do the same, as the JPY looks to recover from its drop on Monday. Amidst the rise in oil prices and gold trading at a 27 year high, there is a influx of investment in nations with a strong commodity base. If these trends continue we should see the JPY stay on its downward trend.
[B]Technical News
EUR/USD [/B]
On the 4 H chart we notice that the bullish trend is running ahead. The volatility is increasing, especially after the pair has broken the 1.4425resistance level. The price should continue to move upwards in a range of 1.4350 to 1.4460. As it stands, the bullish pressure will continue to gather momentum on the EUR USD today as well.
[B]GBP/USD [/B]
On the 4 H chart, a rising wedge (bullish) is forming which may imply a continuation of the bullish trend; it’s recommended to time the entrance to the market with short term charts, 2.0600 seems like a strong entry point. At the moment GPB USD is being traded around 2.0500 to 2.0700 range. As the volatility today is low; bullish pressure on the GBP should be expected. The uptrend should continue on 2.0680 resistance.
[B]USD/JPY [/B]
The pair is floating in a relatively tight range for several days now, as can be seen on the 4 Hour chart. No significant break through the114.50-115 range has occurred, and the hourly continue to deliver mixed signals. The daily chart is giving a moderately bullish sentiment with a bit more room to run.
[B]USD/CHF [/B]
The USD CHF is in a bearish configuration. The volatility decreases. USD CHF moves without trend and swings around exponential moving average (EMA 50 and 100). Bollinger bands have tightened. 1H, 4H Elliott pattern implies a continuation of the bearish pressure. The target is expected at 1.1610 .
[B]The Wild Card
Gold
[/B]
There is a bearish channel forming on the daily chart, as the gold is floating on the upper level of it. The slow stochastic has completed the cross above the 80 level, which validates the move as bearish. This provides forex traders with a great opportunity to enter a short position with great bearish momentum.