Markets Patient ahead of Senate Vote

Daily Forex Fundamentals | Written by Crown Forex | Oct 01 08 11:08 GMT |

The markets remain calm after the dollar rally seen yesterday as the trend for today is yet to be clear as all eyes now are on the Senate vote to help decide the future of the currencies. Hope has been somewhat restored in the markets, but as we all know, the markets could once again surprise us! The Euro was able to gain against the dollar as it is currently trading above the 76.4% Fibonacci correction for the medium term ascending channel at 1.4116 as it provide a good support for the pair. As we see on the stochastic indicator on the daily charts, the pair is in need of an upside correction which could provide the Euro with enough momentum to target the 1.4176 resistance before opening the way towards the 1.42 levels. However, a breach of the mentioned correction level could perhaps add more pressure on the pair to take it down towards the 1.40 psychological barrier. Data flowed in from the Zone showing that unemployment in August inched up to 7.5 percent from a revised previous reading of 7.4 percent while the ISM manufacturing reading was revised lower to 45.0 in September from an originally reported 45.3 reading. From the UK, the calendar lacks fundamentals with the exception of the ISM manufacturing reading that showed a slide to 41.0 in September from 45.9 in August. The Royal pound continues to decline but remains consolidating within narrow ranges now between the support level at 1.7786 and the resistance level at 1.7860. Momentum indicators on the daily and four hour charts show the pair is currently trading in an oversold area which suggests the need of an upside correction to help the pair retest the mentioned resistance level where if breached could open the way to 1.7940s yet with the lack of bullish momentum and low volume, the neutral trend will dominate the Sterling's movements. On the other hand, the breach of the support level will result in further declines to 1.7742. As for the USD/JPY pair it is currently trading between the support level at 105.70s and the resistance level at 106.30s as the 100 and 50 day moving averages on the four hour charts are providing good supports at 106.07 and 105.90 respectively. Well dear reader, the trend of the dollar won't be set unless the Senate's vote is out in the open. So lets just wait and see what they come up with after seeing market's reactions when they first refused it… 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.