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FX Thoughts for the Day

Kshitij Consultancy Service Team from Kshitij Consultancy Service at 12/04/09


USD-CHF @ 0.9998/1.0001...Narrowly ranged with bearish bias
R: 1.0020 / 1.0050-80 / 1.0140
S: 0.9975 / 0.9920 / 0.9875-50

Swiss is continuing to trade in a very narrow range. The pair has been remaining silent almost all through this week. Since no significant move on either side was not seen, our view continue to remain the same on the pair. On the upside Resistance is seen in 1.0050-80 region which we expect to hold during the day as the overall picture continue to remain bearish. However, a strong break above 1.0080 might see 1.0130 on the upside. On the downside Support is seen at 0.9975 a strong break below which might see a dip towards 0.9875-50.

Limit Sell Order:
Sell USD 10K at 1.0075, SL 1.0155, TP Open
Sell USD 10K at 1.0130, SL 1.0175, TP Open

GBP-USD @ 1.6640/42...Strong Resistance near 1.67
R: 1.6644 / 1.6712 / 1.6815
S: 1.6599-70 / 1.6501 / 1.6448

Cable has risen and is now testing the 61.8% retracement of the yesterday's fall from 1.6721 to 1.6520 at 1.6644. If broken, it may rise towards 1.6744 during the US session. Today's close above 1.6689 would still keep alive chances of a fall thereafter next week. However, if it manages to close above that we might be headed for an even more volatile days ahead with a bullish bias targeting 1.6900.

But given the strong Resistance at 1.67 (21-month MA) and Support at 1.64 (8-month MA) on the monthly charts, we would expect that the same would be honoured. A lot would depend on today's close.

 AUD-USD @ 0.9254/57...Cautious
R: 0.9260-70 / 0.9330 / 0.9380-0.9400
S: 0.9210-00 / 0.9180 / 0.9120-00

Aussie has risen from the day's low 0.9213 and tested the Resistance seen on the 4-hr chart at 0.9270. Though the Trendline Support on the daily chart seen at 0.9210 has held and Aussie has risen during the day, we continue to remain cautious for the reasons given in the morning edition which is reproduced below.
1) A close below 0.9260 would mean a second consecutive weekly close below the uptrendline seen on the weekly chart. To see the Trendline on the AUD-USD weekly chart click on the following link:
2) Adding to this, a lower close and further downmove below 0.9200 would result in the formation of the Head and Shoulder pattern as seen from the weekly line chart. To see the AUD-USD weekly line chart click on the following link:

As mentioned above, we would remain cautious and watch the market to get a clear idea as whether the uptrend is to continue or the trend reversal is in process.

Happy Trading!

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