| O&F FOREX News & ViewsBy: Head Trader, Derek Frey | |||||
| November 10, 2008 | |||||
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| General Market Comments: | |||||
| Our Signal service generated 669 pips of profit to subscribers last month! Last week we saw the BOE surprise the world with a whopping 1.5% cut in interest rates. From where we sit though, the bigger surprise was the lack of reaction from the market. I mean how often do we ever see any G7 central bank move rates in either direction by 1.5%? One would have expected 1,000 point moves especially because it was a “surprise”. So the lack of a reaction is in fact as much or more of a reaction than a 1,000 point move immediately after would have been. That being said we are now confident to call a near term bottom in the cable. In a more macro sense, we are also calling a near term top in the Dollar index that we expect will hold at least into the New Year. So we remain sellers of Dollars on rallies this week. | |||||
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Europe |
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| EUR/USD: This pair also saw a cut from the ECB but it was in line with expectations and had a muted effect on the pair. However, here too we are calling a near term bottom. We believe the lows posted in October will hold through the New Year. We are continue to be buyers of dips and expect this pair to claw its way back towards the 1.34 level this month.GBP/USD: The cable, as mentioned above, saw a cut from the BOE that was greater than expected. We are also buyers of dips in this pair. That is an easy statement to say but hard to do in practice. It requires one to buy into a falling market which most “advisors” would tell you not to do. But explain this to me then, how are you supposed to buy low and sell high if you don’t buy into a falling market? The answer is not as simple as it may seem. Bottom line is simply it is hard to do the right thing as a trader in the moment, don’t follow the herd, sheep get slaughtered.USD/CHF: This pair is slower to turn than its cousins above. We remain sellers of rallies but with smaller size as we remain weary of another spike towards the 119 level. This pair, when the tide finally turns, has the furthest to fall. We expect this pair to trade parity again in the first half of 2009. |
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| ASIA
Yen, Australian Dollar |
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| USD/JPY: This pair continues to be joined at the hip with the S&P 500. Near term we expect stocks to bounce so this pair will follow. We are also buying dips in this pair targeting moves back to and through 100 this week.AUD/USD: This pair has suffered along with commodities. Notice that Crude oil has found and held support levels near the 60 level. We expect the “harvest lows” to be in the overall commodity complex and are therefore buyers of dips in this pair this week as well. |
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| North America
Canadian |
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| USD/CAD: This pair has seen some major spikes in the past few weeks. These spikes have indicated a turning point in the past so we see no reason to think diffently this time around. We are therefore selling rallies in this pair this week in particular any spikes above 120. |
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| Questions or Comments? Call us toll free: 866.636.6378 or Email the author directly: [email protected] |
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