Majors Trading Near Intraday Lows after Bernanke's Speech

Daily Forex Fundamentals | Written by Crown Forex | Oct 20 08 15:11 GMT |

The speech by Mr. Bernanke in Washington, although was contradictory to what the White House said, yet it was able to support the dollar to continue extending its gains and the stock markets as they rose! He said that the outlook for the economy remains weak and credit markets unfreeze might not help the economy grow, yet he did mention the fact that the economy may need another "appropriate" stimulus package! The 15 nation currency continued to extend its losses to currently trade at the 1.3320s level which is the 61.8% correction for the long term ascending channel that initiated in 13-11-2005 and ended on 15-7-2008. We currently see signs of divergence on the direction indicators as they still support the downside direction but momentum indicators are on the verge of entering an oversold area. Therefore we could witness a false breakout of the mentioned support to perhaps the 1.33 level before rebounding back to the upside in correction movement. But if the pair decides to neglect the fact that a correction is needed, it could extend to the 1.3285 levels. Not a good day for the UK with the fundamentals coming out showing that there is still inflation even as growth is expected to have slowed significantly in the third quarter. The pound continued to trade to the downside where it is currently limited by a support level at the 1.7150s. The pair still has the chance to extend these bearish movements as the ADX indicator has altered to show the downside direction. Although technical indicators on an intraday basis show the need for an upside correction, the resistance level at 1.7190 might be enough to limit further gains and therefore reverse to the downside in an attempt to retest the mentioned support where if breached will take the pair to 1.7118 before targeting the 1.7060 level. Earlier gains for the USD/JPY pair have been erased as the pair declined to currently trade at the 101.70s level. Technical indicators have adjusted to show a neutral trend for the pair as trading is currently consolidating within narrow ranges between the 61.8% correction for the long term upside channel at 101.50 and the resistance level located at 102.20s. Unless we see a successful breakout of any of the mentioned levels, we don't expect the pair to follow a certain trend. Crown Forex disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.