25-Jan-2008
	Headlines How Low Will The Dollar Go?  Start Trading  Demo Account  SuperMini Account  Standard Account  Archive  24-Jan-2008  23-Jan-2008  22-Jan-2008  21-Jan-2008  Market Trend   EUR/USD GBP/USD USD/JPY USD/CHF AUD/USD EUR/GBP Daily Trend Weekly Trend Resistance 1.4865 1.9875 108.25 1.0999 0.8920 0.7548 1.4830 1.9830 107.90 1.0974 0.8900 0.7521 1.4800 1.9800 107.50 1.0950 0.8860 0.7500 Support 1.4720 1.9730 106.70 1.0860 0.8800 0.7420 1.4685 1.9700 106.45 1.0838 0.8778 0.7390 1.4650 1.9685 106.00 1.0819 0.8754 0.7353
	Economic News
	USD
	The USD continued to take a hit yesterday as the unexpected rate cut by the Fed led to a big gain for commodity currencies. The U.S. dollar hit the 1.47 level against the EUR and last traded at 1.4760. An improvement in investors' appetite for risk pushed the USD down vs. the high-yielding currencies such as the GBP and CAD. Yesterday, the greenback fell against the EUR as strong German business confidence data and tough inflation comments by the ECB official dashed hopes for the next interest rate cut in the Euro zone. The USD is also pressured by the widening interest rate disadvantage after the recent "emergency" interstate rate cut. Expectations for rate cuts at the next weeks' FOMC meeting are diminishing noticeably. The contracts are now estimating less than a 75% chance of a cut of 50bp next week. As a result, the dollar has rebounded against the JPY and given back some of its risk aversion related gains against all of the other major currencies. As for the fundamental data, yesterday, there was little reaction to a report showing that the pace of Existing Home Sales in the U.S. fell by 2.2% in December. That confirmed market perceptions that the housing market turmoil, which is threatening to push the economy into a recession, is far from over. Also, yesterday's economic indicator released by the Labor Department reflected a slowdown in the rate of unemployment, but didn't help to move the market mainly because of weak Existing Home Sales figure. The U.S. House Prices also fell 1.8% which was the 1st annual decline on record. Today, there is no economic data expected to be released from the U.S. markets. It is most likely that the prices will vary within the range of the current price corridor.
	EUR
	Yesterday, the EUR raced to its session high of $1.4743 against the USD and was last trading at $1.4770, on track for a 3rd consecutive day of gains. The ECB governing council member Axel Weber said that the Federal Reserve's surprise decision to cut its key overnight lending rate by 75 basis points to 3.5% on Tuesday had not shifted the ECB's focus on Euro zone inflation, dampening rising expectations that it too will have to cut rates soon. Weber dismissed speculation of an ECB interest-rate cut as wishful thinking. As a result, the European rate futures, which were pricing in 75 basis points of ECB easing this year from 4% currently, fell back sharply on Thursday after Weber's comments. Yesterday's European economic data surprised with the German business confidence which has rebounded in the month of January. As for today, there is not much on the Euro-zone calendar but Germany has Consumer Confidence along with Import Prices due for release. Both of the indicators are expected to be slightly weaker than its previous numbers. By now it is quite clear that as the U.S. economy continues to disappoint, we can expect the EUR to stay strong and continue to prosper.
	JPY
	A strong rebound in European stock markets following Wednesday's sharp losses wetted investors' appetite for risk, therefore boosting high-yielding currencies at the expense of the Greenback and the Yen. The JPY was down 0.6% at 107.10 yesterday after earlier slipping to the level of 105.95. Also, yesterday's Japanese Core Consumer Price index rose 0.8% in December from a year earlier, more than the consensus forecast, because of higher prices of gasoline and household goods. Japanese consumer prices rose at the fastest pace in more than nine years in December. In fact, we can see that the global economy is slowing while prices of food and energy keep advancing. That happens to be the worst combination for the Japanese economy, which depends on exports and has stagnating domestic demand. Today there is no economic data expected to be released from the Japanese markets. The JPY may still continue to push further upwards against the USD over the next few hours. As for the weekend, the JPY will continue to float on relatively quiet waters, and that the direction will be directly effected by the ongoing USD weakness.
	Technical News
	EUR/USD
	The 4 hours chart is implying on an upcoming bearish correction as the Slow Stochastic was crossed above 90 and has a negative slope heading towards neutral territory. This pair will probably test the 1.4700 level, however if a breakout would not occur, it's more likely that we will once again see the 1.4800 level being breached.
	GBP/USD
	This pair is now rallying back sharply after being on a steady downtrend, however this uptrend now seems to be topping out. The Stochastic Slow is crossing at 100, which is deep in overbought territory. It may be a good opportunity to enter an early short position.
	USD/JPY
	This pair is in the midst of a wide downward channel and this pair is now heading towards the top of this channel. All indications are that there is room for further upward movement and the preferred strategy today will be to go long on dips.
	USD/CHF
	Even though this pair is now correcting slightly, the overall trend is still very much bearish. However this pair now seems to be heading upwards and this is supported by the positive RSI and Momentum. The inter-day trend is bullish but this pair is still in the midst of a longer term bearish move.
	The Wild Card
	Gold
	After dipping sharply last week, this commodity has now resumed its unrelenting bullish surge. There are many indications that this pair will test the $100 level in the near term. Therefore forex traders can maximize profits by entering a buy position on both the long and short term outlooks.
	Indicators  Date  Time  Country  Event  Period  Previous  Forecast  Importance 2008-01-25 12:00:00 CAD CPI m/m 0.3% 0.1% *** 2008-01-25 12:00:00 USD Core CPI m/m 0.0% -0.1% ****
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