Free Forex Signal

The signs that the dollar may have reached the bottom add up. However, we are waiting suspensefully for the U.S. GDP figures for the second quarter and the FOMC interest rate decision, which are to be announced this coming Wednesday, to get a clearer picture and confirmation. Until then, like today, some light upwards movements of the USD seem to be the likeliest scenario.

Intraday Market Outlook for Day Traders

EUR / USD
Currently trading at 1.5658, the EUR / USD is struggling to recover some of its losses. These efforts could find resistance at 1.5700, where we expect the downtrend to resume. Sell at 1.5700, with a target of 1.5560 and a stop at 1.5720. See chart below.

GBP / USD
After a steep drop in early European trading, the GBP / USD is also attempting to recover and is currently trading at 1.9870. We expect this recovery to continue meeting resistance only at 1.9950, where at least a consolidation could set in. Those traders who prefer the GBP / USD pair, as opposed to the EUR / USD pair (our recommendation), may establish short positions at this resistance level.

USD / CHF
After saying goodby to its old lower trading range, a new USD / CHF trading range is in the process of being formed, with the lower end at 1.0270 and the upper end at 1.0400. Currently trading near the lower end, at 1.0317, due to its oversold position, further upmoves are the most likely outcome for today. Nevertheless, we have no specific recommendation for today.

USD / JPY
Decision time for the USD / JPY: The constructive saucer pattern is now completed and waiting for its bullish confirmation, i.e. an outbreak over the 104.80 level. Currently trading at 104.42, we would like to see this outbreak first before we would consider any long positions. See chart below.

EUR / USD Chart

USD / JPY Chart

GBP/USD
Moves down below pivot level 1.9798 . Immediate resistance seen at 1.9919 while support seen at 1.9707 .
Mon, 28 Apr 2008, 07:21 GMT

USD/JPY
Trades above pivot level 104.37 . Immediate resistance seen at 104.83 followed by 105.29 , while support seen at 103.91 .
Mon, 28 Apr 2008, 07:23 GMT
 

SYDNEY (Thomson Financial) - The U.S. dollar was trading mixed late morning on Monday in a narrow range after firming on Friday as opinion grew that the Federal Reserve might pause in its easing cycle after an expected quarter percentage point cut in the central bank’s target funds rate this week.

At 11:30 a.m. (0130 GMT) the euro was at $1.5633, up from $1.5620 in late New York trade on Friday. The dollar was at 104.72 yen, up from 104.40 yen.

The Federal Open Market Committee (FOMC) meets on Tuesday and Wednesday to decide whether to lower interest rates again. It will also issue an updated assessment of the U.S. economy and financial system.

Most investors believe the Fed will lower rates by another quarter percentage point but will also suggest it is gearing up for a pause.

Already, the central bank has incrementally reduced the key federal funds rate by 3 percentage points since last August to 2.25 percent from 5.25 percent. On top of rate cuts, the Fed has been lending more money to banks, while the government is preparing to send out tax rebates.

NAB Capital Markets chief economist Rob Henderson said he expects the FOMC to cut the funds target rate to 2.00 percent.

Despite expectations that the FOMC will then be finished with rate-cutting, Henderson said the market will first have to contend with more bad news on the data front.

He said advanced first quarter gross domestic product (GDP) data due out on Wednesday is forecast to show growth of just 0.3 percent annualised growth though the result could be negative.

On Thursday the April ISM Manufacturing index is expected to fall a touch further to 48.3 while on Friday April non-farm payrolls data is likely to show another up-tick in the unemployment rate to 5.2 percent from 5.1 percent in March and a fall in jobs of 75,000, a slight improvement on the 80,000 jobs lost in March.

On the positive side, tax rebates of $330 to $1,200 per individual are due to be posted on Monday, forming the centrepiece of the federal government’s $168 billion fiscal stimulus package.

Meanwhile, the Bank of Japan is not expected to change its policy rate from 0.5 percent after Wednesday’s policymakers’ meeting though data showing a rise in core inflation was likely to put more focus on the meeting, Henderson said.

John Noonan, a senior foreign exchange analyst at Thomson IFR, said the direction of the foreign exchange market this week would largely be determined by scheduled events.

"The FOMC meeting promises to be a major event in that it is expected to signal the end of the dramatic easing cycle the Fed has been on since the credit crisis stormed through," said Noonan.

He said there was a lot of new-found optimism on Wall Street with many saying that the end is near for the U.S. moving into recession, though this view would be severely tested later in the week when the payroll data is released.

Sydney 11:30 a.m. (0130 GMT)

U.S. dollar

yen 104.72 yen

Swiss franc 1.0349

Euro

U.S. dollar 1.5633

yen 163.670

Swiss franc 1.6181

pound 0.78886

Pound

U.S. dollar 1.9824

yen 207.563

Swiss franc 2.0511

Australian dollar

U.S. dollar 0.9352

pound 0.4718

yen 97.915

New Zealand dollar

U.S. dollar 0.7841

bruce.hextall@thomsonreuters.com

Monday April 28, 2008     
     
EUR-USD    
It may meet resistance in 1.5593 - 1.5618 zone for a drift down to 1.5517 zone, after which bounce to 1.565 is anticipated.    
     
GBP-USD    
It should trade higher to 1.992 while 1.9798 or 1.9752 offers support. Stop loss below 1.9706 zone.    
     
USD-JPY    
While below 104.85 it is more likely to fall further towards 104.16 or 103.93. Premature rise above 104.85 could see it rising above 105.3 zone.    
     
USD-CHF    
Should test support at 1.03 while below 1.0364. If support at 1.03 holds it can rise up to1.0429, if not it should fall to below 1.0237 zone.