Archive for August, 2007

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Forex daily market comments Monday August 27, 2007

Posted in Daily market comments by Practical trader on August 27th, 2007

Monday August 27, 2007

EUR-USD 1.3667. Uptrend is still intact in a triangle configuration. It should continue to rally to 1.372 or 1.3762 if support around 1.3634 hold. After which a pullback to 1.3634 - 1.3611 zone is possible.
GBP-USD 2.0134. Uptrend is still intact in a triangle configuration. It should continue to rally to 2.0171 or 2.0243 if support around 2.0084 hold. After which a pullback to 2.0084 - 2.0057 zone is possible.
USD-CHF 1.2016. Market should pop up towards 1.2066 or 1.2115 this bullish scenario would be damaged if 1.1987 - 1.1976 zone is broken, a severe break down could then occur.
USD-JPY 116.38. Uptrend is still intact in a triangle configuration. It should continue to rally to 116.48 or 117.12 if support around 116.14 hold. After which a pullback to 116.14 - 115.96 zone is possible.
EUR-JPY 159.07. Uptrend is still intact in a triangle configuration. It should continue to rally to 159.54 or 160.77 if support around 158.27 hold. After which a pullback to 158.27 - 157.85 zone is possible.
EUR-GBP 0.6788. A corrective/consolidation activity between 0.6765 and 0.6826 is likely for a while.
EUR-CHF 1.6423. Market looks set for gains towards 1.6460 or above in extension. Dips should find support at 1.6393 - 1.6375 zone.
USD-CAD 1.0522. Current fall is near an end of wave around 1.0467 - 1.0506 zone, a rally should then proceede to above 1.0545 or 1.0563. Fall below 1.0451 would cancel this scenario.

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Forex daily market comments Friday August 24, 2007

Posted in Daily market comments by Practical trader on August 24th, 2007

Friday August 24, 2007

EUR-USD 1.3565. Current rise should end around 1.3562 or 1.3591. Objectives of this down move are 1.3537 or 1.3508. A rise above 1.3616 is again bullish.
GBP-USD 2.0058. A correction down to 1.9952 followed buy a move up to 2.0076 or 2.0129. A break above 2.0200 would accelerate this bullish move.
USD-CHF 1.2072. Decline should be supported around 1.2045 - 1.2018 zone for rally to above 1.2132. A clear break of 1.2018 will damage this expected rally.
USD-JPY 116.19. Resistances lie around 116.66 and 118.04. It should test lower towards 115.28 zone. A clear break of 116.14 would be bearish.
EUR-GBP 0.6761. Overall structure is bearish. Decelerating momentum could attract it towards supports at 0.6751 or 0.6744. Major support is clustered around 0.6726 limit.
EUR-CHF 1.6376. Should test support at 1.6336 while below 1.6376. If support at 1.6336 holds it can rise up to1.6418, if not it should fall to below 1.6295 zone.
AUD-USD 0.8210. Uptrend is still intact in a triangle configuration. It should continue to rally to 0.8297 or 0.8315 if support around 0.8164 hold. After which a pullback to 0.8164 - 0.8138 zone is possible.
USD-CAD 1.0531. It is likely to attempt to go below 1.0386 while below 1.0531 - 1.0546 area. Rise above 1.0619 would dampen this bearish expectation.

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Forex daily market comments Thursday August 23, 2007

Posted in Daily market comments by Practical trader on August 23rd, 2007

Thursday August 23, 2007

EUR-USD 1.3542. Uptrend is still intact in a triangle configuration. It should continue to rally to 1.3555 or 1.3615 if support around 1.3514 hold. After which a pullback to 1.3514 - 1.3496 zone is possible.
GBP-USD 1.9928. It should trade higher to 1.9971 while 1.9887 or 1.9865 offers support. Stop loss below 1.9843 zone.
USD-CHF 1.2064. While below 1.2053 or 1.2072 it could fall towards below 1.2034 or 1.2003. After which a corrective/consolidation activity is expected to 1.2088 zone.
USD-JPY 115.34. It should trade higher to 115.87 while 114.94 or 114.67 offers support. Stop loss below 114.40 zone.
EUR-JPY 156.20. It should trade higher to 157.17 while 155.27 or 154.79 offers support. Stop loss below 154.31 zone.
EUR-CHF 1.6338. Current rise seems to be over near 1.6340 or 1.6376 for a retracement towards 1.6303 - 1.6285 area.
AUD-USD 0.8065. It may attempt a test higher to 0.8068 after which weakness may set it to a drift down to below 0.8000 limit.
USD-CAD 1.0620. Strength can extend to 1.0643 or even higher than 1.0666 as declines are expected to find support at 1.0597 or 1.0574. Stop Loss below 1.0527 zone.

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Forex currency volatility hurts carry trade

Posted in Forex general by Practical trader on August 22nd, 2007

Mid July 2007 has caught many carry traders off-guard. Currency investors are suffering their biggest losses in years as wider swings in Forex currency market knock the carry trade off the rails.

Carry trade, the most profitable strategy in foreign exchange, thrives when exchange rates are stable since the technique involves buying and investing currencies of countries that have high interest rates using money borrowed in Japan. With huge spikes in currency volatility traders are forced to get out of their carry trades.

Forex carry trade theme

An index of volatility for major currencies more than doubled from a record low in June 2007.

Volatility index 2007

Investors buying back yen drove it to 112 per dollar last week, cutting carry trade profits.

Dollar to Yen 2007

Sources JPMorgan,
Bloomberg.com


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