Covering the Gaps!

Daily Forex Fundamentals | Written by Crown Forex | Nov 17 08 12:14 GMT |

The dilemma in financial markets continues as the outlook continues to be a deeper economic recession as major economies falter through 2009! The hope held for world G20 leaders the beholders of nearly 90% of global growth rather disappointed markets as they tended to focus on preventing a new crisis such as this from reoccurring rather than fix the one at hand! The pledged to reforming the functionality of financial markets with proposals to be handed by the end of 09 first quarter and for the current crisis they pledged actions by governments and all measures to be taken which is practically nothing new preparing markets for more monetary policy easing to be seen. Japan has been added to the list of nations in recession which added more weight to markets as equities are declining in Europe and majors are not covering the gap they have opened to as again nothing has changed and fundamentals are not heavy so technicalities are taking over on the first trading day for this week. The Japanese yen that was weakened with recession has covered its opening gap by rising to set its high today at 97.56 yet failed to exceed that level as it was also pressured down by the 20 days MA; its trading near its intraday lows currently around 96.40s where the pair is reflecting conflicting signals from momentum indicators over various time scales which set the pair to fluctuate further through the day. The pair seems though to acquire downside tendency and breaching its lows set at 96 levels will take the pair to set its target at 95.50-40; while adjusting to the upside the pair needs to steady above 97.50s to manage to breach 98.35 levels which is the 38.2% correction for the latest downside wave and as far as the pair continues to trade below this level we will favor the downside. The pound is heading higher to cover its opening price gap and so far managed to do so; sterling is heavily oversold on daily basis yet over intraday basis the pair is providing mixed signals from momentum indicators, especially as the direction indicators are still negative and have not weakened strongly to indicate the near ending for the downside wave; for that we expect the pair to have peaked for today at 1.4965 and to continue to head lower after that especially that again the 1.50 remained intact and as far as trading is below that level downside targets are valid which now are set at 1.4413 levels. Meanwhile concerning the euro the currency has been as well as other majors fluctuating heavily in the past period, despite the fact that Germany the area's and Europe's largest economy entered recession leading the 15 nation into contraction the euro had fairly responded on better terms versus majors especially with France evading recession slightly hope is seen that the Euro area will bounce back on quicker terms that from other majors! The narrowing trade deficit had little of effect on the euro as much as the currency needed to recover the gap, and optimism regarding European governments and the ECB to act quickly to address the economic weakness. The currency has inclined today to so far set the thigh at 1.2699 and lingers still above 1.26 levels, yet as the momentum indicators are reflecting conflicting signals we do not expect the euro to breach the key resistance for the triangular model which its main resistance resides near 1.3739 levels preceded with the 20 Days MA at 1.2715 and as far as trading is below those levels the downside tendency will be stronger which might take the pair again lower towards 1.24 levels ahead of further lower targets at 1.2324. 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.