ForexGen Trading Outlook

REVIEW: 22 August 2008


Friday's strong reversal was due to a double hit of much weaker commodity prices (as global concerns begin to cool off) and a Bernanke inspired rally on the USD. The Fed chief seemed to indicate that the Fed is ready to fight inflation in the future as oil prices decline and the USD stabilizes. Those are mighty bold statements since forecasting energy prices and the USD that far in advance seems a little speculative but nonetheless, traders liked what he had to say. Equities surged, followed by the USD and a weak JPY. Overall, across the majors it was as though Thursday's price action had not even occurred. Risk still seems high and clearly volatility will give most traders a rough time in the near term.

PREVIEW: 25 AUGUST 2008


We start the week with Trade in New Zealand and start looking forward to the remaining economic announcements including FOMC minutes and GDP in the US. If there is one thing we can count on, it is volatility. Therefore, traders should be watching the intermarket environment for signs of trouble. In particular I think we should be paying attention to equity prices. Despite the dramatic reversal in favor of a weak JPY, equities are still trapped within a consolidation pattern and face a significant prior down trendPFX Forex Trading Outlook

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Elliott wave: OIL & Usd/Chf

Gold hit the resistance area on Friday that was highlighted in our analysis, and along with a big drop in oil prices, pushed Eur/Usd lower. The euro now starts the week around 1.4700. The market may try to trade lower this week if the price of gold and oil continue their decline, and that may be lead by sentiment initially, but fed by a week of important U.S. based economic data. The moves on the euro automatically equate to new highs on Usd/Chf which bounced from the trend-line support that we have been looking at in recent posts, on Friday. We have an update on the one hour chart swissy chart, and have gone to the weekly oil chart to really get to the bottom of the technical story on oil. After all, who needs headlines when we have daily Elliott Wave analysis on the movers of the market?


OIL

Most currency pairs are highly correlated with Oil and Gold, they have to be in the respect that over 90% of all currency tickets has the Usd on one side of then or the other, as the Usd is the currency that international markets price oil in, traders should be watching commodities closely to find the right way on euro or swissy trends. We have kept this chart simple because that is the way that we like most charts to be; we have four clear waves with wave five to come. The chart is looking for technical support in wave four on Oil, which should slow down the short moves on Eur/Usd and push the Usd/Chf lower. Before that, we may need to see...

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USD Against EUR

Dollar posted 5-week gains against Euro

News and Events:

The Dollar jumped to a 6-month high against the Euro on Friday, helped by another drop in oil prices and growing views the US economic slowdown may be bottoming while growth in the euro zone stalls. It also posted a fifth week of gains as investors shifted their view on the global economy's ability to withstand a downturn initiated in the United States.

Data in the US on Friday showed an unexpected rise in manufacturing activity in the New York state area and an increase in industrial output and consumer confidence. By contrast, reports on Thursday showed the euro zone economy contracted in Q2 for the first time since the common currency's inception.

A steep drop in commodity prices also has lent support to the Dollar easing concern about the US economic outlook in the second half of the year. Crude oil prices slid further on Friday and ended 0.9% lower at 113.90 per barrel.

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FOMC Expected Rates

FOMC Kept Rate Steady At 2% As Expected

News and Events:

The Dollar climbed to seven-week peaks against the Euro and major currencies on Tuesday, as oil prices plunged and the Federal Reserve maintained its focus on slowing persistent US inflation pressure in the economy.

Analysts said Tuesday's Fed statement was more balanced than what the market had expected, as it expressed concern about both economic growth and inflation. Another comment showed the Fed statement does not point to one clear rate path.

The drop to a three-month trough of $118 per barrel helped ease fears that high energy prices will continue to weigh on the US economy at a time consumer prices are showing an unexpectedly fast rise.

AudUsd was among the weakest performers on Tuesday, falling to a four-month low at 0.9133.

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ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

The Forex Market Today

The Markets Today Thursday 31 July 2008 / 10:50h CET

EUR/USD	1.5610
EXPECTATION		THE RISK	SUPPORT AND RESISTANCE
We remain Dollar bullish. 1.5625 initial resistance, trend-line at 1.5665 – sell tops, expect a dip to 1.5500, target 1.5350 by tomorrow.		A clear break of 1.5665 stops the immediate bearish move and can see the pair recover to 1.5750 key.	1.5590 MINOR 1.5625 MINOR 1.5525 STRONG 1.5665 TREND 1.5490 STRONG 1.5750 KEY

GBP/USD	1.9805
EXPECTATION		THE RISK	SUPPORT AND RESISTANCE
Cable is still holding the 1.9800 level, but the old bullish trend has been crossed long ago and we are waiting for a fall to 1.9660 or lower.		Initial resistance 1.9830 broken risks a rise to 1.9915 key.	1.9765 STRONG 1.9830 STRONG 1.9720 MINOR 1.9915 KEY 1.9660 STRONG 2.0000 STRONG

USD/JPY	108.20
EXPECTATION		THE RISK	SUPPORT AND RESISTANCE
As long as it remains above 108.05 we like to keep longs, target remains 110.		A break of 108.05 risks 107.70, an hourly close lower stops the bullish move and risks a set-back to 106.75	108.05 TREND 108.30 MINOR 107.70 STRONG 108.50 STRONG 106.75 KEY 108.90 MINOR

USD/CHF	1.0470
EXPECTATION		THE RISK	SUPPORT AND RESISTANCE
It maintains very high levels and is set to cross into the 1.05 handle for a push towards 1.0660		Watch 1.0445 initial support, a break there risks a set-back to trend-line at 1.0345	1.0445 STRONG 1.0500 MINOR 1.0405 MINOR 1.0540 MINOR 1.0345 TREND 1.0660 TARGET

XAU/USD	912.00
EXPECTATION		THE RISK	SUPPORT AND RESISTANCE
Gold fell and recovered but is unable to cross the old 917 key level. Stay short, we look for another fall towards 885		An hourly close above 917 can see Gold recover up to 930	906 MINOR 917 STRONG 895 STRONG 925 MINOR 885 TARGET 933 KEY

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex News | Dollar VS Oil

Dollar rallies to one-month high on Oil drop and Confidence rise

News and Events:

The Dollar soared to a one-month high against a basket of currencies on Tuesday, benefiting from a steep drop in oil prices and an unexpected rise in US consumer confidence.

Analysts said Merrill Lynch's announcement late on Monday of yet another write-down and capital-raising exercise also helped support the Dollar, as they raised hopes the turning point in the yearlong credit crisis was close.

Oil fell as low as 120.42 yesterday before ending only $2.5 down at 122.19. A decline in oil prices tends to benefit the Dollar, as it eases some of the growth concerns.

Second-quarter US GDP on Thursday and Friday's US non-farm payrolls figures for July will be the market's main focus later this week.

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Crude Oil And Better US Data

Market is looking for direction with lower Crude Oil and better US data

News and Events:

Last week upbeat readings on US durable goods orders, new home sales and consumer sentiment released buoyed the Dollar by lifting some of the gloom over the US economy.

The ongoing slide in crude oil prices is also supporting the greenback.

FX market is eyeing the direction of crude oil prices and US non-farms payrolls data, which is due on Friday.

European corporate earnings due this week may provide some direction to the Market.

Throughout our partnership with the industrial leaders, we are capable of delivering incomparable quality of online currency trading service.
ForexGen services are all controlled by the international banking and financial regulatory standards.
ForexGen is continuously providing the Forex market's safest trading terms & conditions. Providing professional currency trading services that meet our client's expectations is our first priority.

ForexGen principals:

ForexGen customer satisfaction is our major objective. To reach our business goals, we strive to put our client's goals in focus. We highly value our clients and always aim to exceed their expectations and cross the limitations encountered by the sophistication of the Forex trading industry.

Forex Market Overview

Forex Market Overview 18 July 2008

Usd consolidated in Asian session, as the current environment paints a mixed picture creating indecision in traders. EurUsd in choppy trading ranged from 1.5783 to 1.5866 while UsdJpy was slightly stronger, rising above 107.00 in early trading, before retracting back to 106.13 as the day wore on. Jpy fueled carry trades followed a similar pattern. Commodity bloc ccy’s continued to hold up despite general pullback in commodity prices. AudUsd was able to rally off the 0.9680 session, lows to 0.9725. Try was able to gain on the back of their Central Bank raising rates 50bp with UsdTry falling to 1.1950. Usd sentiment is clearly varied and will stay so for today’s trading.

Equity markets in the US clearly got a boost from yesterday’s sharp fall in oil prices--down almost $5bbl to $129.50bbl (partially due to reports the US will attend nuclear talks with Iran, easing perceptions of geopolitical tensions). This optimism was also reflected in yields with 2-year up 2.50%. This weeks decline brings up an interesting situation if energy prices continue to decrease, many central banks will take this as positive sight that inflation pressures will also ease. Which will therefore, provide policy makers with the perceived opportunity to address deteriorating growth by lowering rates.

Australian terms of trade for Q2 were better than expected. Export prices for Q2 surged by 13.5% vs. 10% exp q/q, while import prices grew by only 1.4% vs, 1.7% exp q/q. The rise in export prices reflects a broad based surge of commodity demand. As stated above Aud and the rest of the commodity bloc remains supportive of commodity prices and yield differentials.

BoJ minutes revealed a slightly more hawkish view on inflation than expected, however it is clear that members will be focused on the downside risks near term. In addition Shirakawa noted that Japans economy is more insolated from external shocks than previously believed. We are targeting 108.00 despite the unsettled nature of risk appetite.

Another light day in European session and with summer Friday clearly in effect, we expect trading to be subdued.

Daily Forex Pivot Points
AUDUSD
R 3: 0.9895
R 2: 0.9849
R 1: 0.9818
CURRENT: 0.9718
S 1: 0.9675
S 2: 0.9664
S 3: 0.9597

EURJPY
R 3: 170.00
R 2: 169.67
R 1: 169.11
CURRENT: 168.39
S 1: 165.23
S 2: 164.76
S 3: 163.60

USDSGD
R 3: 1.3717
R 2: 1.3661
R 1: 1.3565
CURRENT: 1.3521
S 1: 1.3452
S 2: 1.3399
S 3: 1.3300

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