At the Close. Standstill.
London goes home having not cleared any of the questions I put up yesterday. In fact, today's price action has not been anything else than a 'bore' from a daily cahrt point of view, and quite nervious from an intraday point of view, with many spikes here and there that really led to nothing. Further, if you were to drive on to any conclusions using today's price action, I guess the conclusion would be: 'wait one more day'.
Indeed, what a tricky day today, with the USD up, then down, then back up and now down again, with no real triggers happening, well, that except of the current test-break?- of the intraday uptrend line in the Swissy. If that is confirmed, we could see the USD suffering from here.
Cable is the currency that is posing the biggest threat to the USD at present. The daily picture in Cable will only get beneficial for the USD when 2.03 is brokne back down, any other level out of that may lead speculators to push for that magic 2.10 they are envisaging (along with a 1.50 in EUR/USD). Today's price action one should take it as part of the market's nervousness at these levels, with the big hands wiating for the clear signal to attack and catch as many investors wrong-footed as possible, and feed themselves from their stops.
The only pairs today that made me smile were JPY crosses, but this time the fall in EUR/JPY (Stocks are down, too), was not accompanied by a fall in AUD/USD. The unit, despite breaking a dynamic support line, was able to hold the 50EMA in the 1hr chart and bounced off strongly, again not making the picture any nice for the USD. A break below 0.89 is needed for the USD to be in better shape, that is quite some distance from current prices anyway...
Some say that the proximity of the FOMC rate decision will keep the markets on hold, but I don't quite share that view, and I believe the market will go for a big move before the actual FOMC meeting takes place. As the market is already discounting further rate cuts, the direction of the move is quite difficult to predict, as such rate cuts have been priced in for over 1 month now...
Alright, time to say good-bye for now, as the Barcelona ITC (FXstreet.com) starts tomorrow and I'll be there these days. I hope I'll be able to post something these days, keep in touch with the market etc... anyway, I wish you a happy trading these days. Thank you very much for being there. Bye 4 now.
Posted by Tony Juste on October 24, 2007