Stable Trading after a Big Drop

Daily Forex Fundamentals | Written by Crown Forex | Dec 02 08 08:19 GMT |

A big set back in carry trades yesterday has pushed the yen higher against high rated currencies and the USD, the overwhelming economic conditions spread fear in investors especially after the US economy reporting worst than expected in the industrial and mortgage areas which confirmed to investors that the recession in the economy is deepening. Investors sold high yielding assets and stocks, which set the stocks to close on a drop due to the decline in the industrial market wich is the lowest in 26 years, meanwhile investors turned to the low yielding yen and the dollar as a low yielding asset after its interest rate were stable at 1.0% and expected to drop. The national bureau for economic research stated yesterday that the US economy has slipped into recession since December 2007 and that the economic expansion that they witnessed in 73 months ended, the glooming period continued 10 years and ended in 2001. The Reserve Bank of Australia lowered their interest rates by 100 basis to reach 4.25% opposite what was expected. The Euro witnessed a drop against the Dollar and Yen yesterday, today the pairs seems more stable trying gain some profits, the level 1.2577 stopped the downward move of the pair while short term momentum indicator showed that a decline is still possible, the lower targets for Euro is 1.2458 level which is inline with upward line of the medium term, the Euro recorded high level at 1.2650 and lowest at 1.2587 level in the Asian session. The Pound was the biggest loser against the Dollar and Yen due to the effect of the drop in the carry trades, he managed to breach the support level of 1.4980 before is stopped at 1.4800 level which is inline with the upward line of the medium term, today the Pound witnessed tight trading at level 1.4800 and below 1.4980 but technical indicators still show a downward movement to the pair, highest level for the pound was 1.4944 and lowest at 1.4847 level. The Japanese Yen was the biggest beneficiary from the drop of the carry trades, the USD/JPY moved away from the correctional level 23.6% at level 95.50 that was traded for 10 sessions to drop after that deeply to reach 93.00, technical indicator showed that there could be a downward movement and the first short term targets is set at 92.00 level, the pair highest level was 93.82 and lowest at 92.97 level. 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.