Thin Forex Trading Due To Public holidays In UK
Dollar traded mixed against the basket of currencies on Monday as the main players from Europe were missing due to the public holiday in UK. The economic calendar was almost empty and the sole significant data was the US Existing home sales for July, which rose to more than the expected 4.90 million to 5.00 million. The euro scored a minimal decline against the dollar to $1.4779, despite the news that IMF has cut its growth estimate for the euro zone to 1.4%from 1.7% for 2008 and 0.9% from 1.2% for 2009. On the contrary the sterling managed to advance against the greenback to $1.8546 recovering from the 2 year low hit earlier in the day. The dollar fell against the yen reaching the level at 109.41 yen, as the US equity market again headed lower, hurt by the persistent credit concerns, which prompted investors to reduce risk.
EUR/USD
Neutral trading remains as the euro continues to consolidate in a narrow range between the levels 1.4650 and 1.4980, which are respectively 50% and 38.2% retracement of the 1.3262-1.6035 rise. Probably the lack of clearly defined direction would maintain in the following days. Despite that, the risk for a new drop is still in effect as the main goal would be the key support level at 1.4320, which is 61.8% retracement of the mentioned rise. A break of that level could open a potential for a new steep decline, and a long lasting positioning below that level could even lead to a trend reversal in the mid term. On the upside above 1.4980, resistance is seen around the level 1.5250, which coincides with the 200 SMA, followed by 1.5440.
EUR/USD (chart, table)
USD/JPY
The short term picture remains unchanged as the yen continues to consolidate in a narrow range around the level 109.90, which is 50% retracement of the 124.12-95.75. Probably the neutral trading will be over soon and in the next days we can expect a resume of the upward movement with a main goal – the resistance at 113.30, which is 61.8% retracement of the mentioned drop. A decisive break of that level would affirm the forming in the moment positive mid term trend. On the downside support is seen at 108.20, which coincides with the 26 SMA, followed by 106.60, which is 38.2% Fibo retracement coinciding with 200 SMA and 104.90.
USD/JPY (chart, table)
GBP/USD
The sterling managed to hold around the level at 1.8470, which for the moment shows support to the downward movement and keeps the pair into a neutral position. Despite that the mid term trend remains negative and the downward movement is likely to continue but before a new steep decline we could witness a short narrow range consolidation. The next main goal is the support at 1.8080, followed by 1.8000. On the upside, first resistance is seen at the level 1.8790, followed by the key 1.9120, which is 23.6% retracement of the 2.1159- 1.8512 and 1.9315.GBP/USD (chart, table)
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26.08.2008 FX daily review.pdf, 605 Kb
