Market View for Dec 19, 2008
Today we have witnessed spectacular moves in foreign exchange once again. Today’s market has been a dollar positive across the board, with the dollar regaining ground against the Euro and the Pound. It has been mentioned that, there has been some unwinding of long Euro positions, and we should see Euro trading lower. Crude oil has also shown levels not seen in four years, and it has been noted if oil trades below $32 the next technical support is around $25. Oil has also been great barometer of how the world economy is doing and how its demand for fuels has decreased.
Our Focus Today:
GBP: Today the pound has been trading drastically lower against the dollar, after the rally from the Fed’s rate decision, on December 17th the pound reached a high of 1.5716. Last night in European and this morning in the NY session, we saw massive dollar buying and cable trading down to 1.4880 from 1.5520/30 level. We look to be back in the trading range from last week. The next support is 1.4815, a low of December 12th. Later today the UK will report Gfk Consumer confidence and a revision of Business investment early in London open.
JPY: The dollar Yen move higher has also shown that this is merely a stronger dollar move. These couple of days the USD/JPY has not been following the equity markets as they keep moving lower. 90.16 is the next resistance level, with target support of 88.55.
EUR: There has been a change in the Euro trend in yesterday’s trading. Several technical indicators are signaling a change in the trend for this pair as Euro trades close to parity with the pound. A rally in us treasuries also helped the dollar gain some ground, as investor’s demand for safety in principal investments increases. We see support at 1.4210 levels, but a break of this level will take us to 1.4020.