Markets Calm and Movements are Narrowed

Daily Forex Fundamentals | Written by Crown Forex | Oct 13 08 14:43 GMT |

Majors continue to find support from the different government plans to support banks as policy makers strive to restore confidence and stability in financial markets. The ECB, BoE and Swiss National Bank all pledged to provide unlimited amounts of dollars to ensure full liquidity in the market while US Treasury's Kashkari said he would support healthy institutions. With the US markets out for holiday, Dow Jones started the session advancing more than 400 points but trading for currencies are still consolidating within narrow ranges.

The 15 nation currency after advancing against the dollar remained trading within narrow levels as it is currently facing a resistance represented by the 23.6% correctional level for the downside channel at 1.3640 where at the same time we see the 14 and 20 day moving averages close to each other as they limit further losses seen by the EUR/USD pair at 1.3580-1.3610. We see direction indicators supporting the upside direction for the pair but contradiction in the momentum indicators shows that the pair is being overbought on the four hour charts but slightly oversold on the weekly. Yet overall, we see that there is still some potential to see the pair incline but not having enough momentum to successfully breach the mentioned resistance level before slightly falling to the support levels at the moving averages before reversing to the upside.


The GBP/USD pair inclined as well after the government said it would provide $73 billion for troubled banks but lacked enough momentum to breach the resistance level at 1.7440s which is supported by the 50 day moving average on the four hour charts. Trading is within the mentioned resistance level at the support level at 1.7342 but there is still chance for the pair to extend its gains further as we see technical indicators have yet showed signs for divergence to the downside.

After being the victim of carry trades, the greenback versus the yen was able to incline from the 99.50s early morning to currently remain consolidating at the 100.30-100.40 levels where it is finding difficulties in breaking the 100.50s resistance level which will open the way towards the 23.6% correction level for the descending channel at 100.80s. The 20 day moving average at the 100 level on the four hour charts is still providing a strong support for the pair.

Crown Forex

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