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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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Capturing militants as price forming factor…Forecast on the dynamics of USD/CHF and USD/CAD rates.
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07:36 03/22/2004
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Capturing militants as price forming factor…Forecast on the dynamics of USD/CHF and USD/CAD rates.
Recent history shows that the dollar has always reacted by significant rise to news on capturing another world militant. Thus, on Friday, market participants started purchasing American currency on the news that Usama bin Laden was captured in the mountains on the border of Pakistan and Afghanistan. However, later, Pentagon representative declared that they had no proof of capturing number one militant.
Great number of large offers protected option barrier on the level of 1,24450. Breaking-out of that level could result in EUR/USD rise to 1,2600. Pushing the support down to 1,2175 could be a strong signal for global decline of the Euro to the level of 1,1565. 1,1850 is likely to become the first target on that road.
On Friday evening, Western agencies, such as ?P, CNN and Reuters, declared number of explosions in Baghdad near American headquarters. Leaders of Iraq resistance had “celebrated” the anniversary of coalition invasion in Iraq.
It is worthwhile noting that the given news did not produce expected effect o the market. As you know, the rate reached quite significant levels, despite the given news.
Great intrigue was carried-out by Japanese financial officials, who brought stops of numerous sellers of USD/JPY seven patterns up. Now, they indifferently watch quick rate decline. At the same time, minister of finance Sadakazu Tanigaki repeatedly reminds that his department is ready to sell the yen, in case correlation of exchange rates does not reflect fundamental realities.
Seriousness of minister’s words is proved by the fact that in the first two months of this year, the Bank of Japan bought $98 billion, having sold a record sum of 10.5 trillion yen, in order to restrain rise of nations currency.
In fact, when doing so, minister “declared secret war” to speculates who has always been blamed for all the mistakes of course policy of Japanese government.
On the given background, any recommendations or forecasts on USD/JPY rate are fraught with great losses.
In the nearest days, market will attentively watch any news on the possibility of conducting new terrorist attacks of capturing militants. In case today we get the proof of capturing one of the nigh-rank members of militant grouping al-Qaeda, who is responsible for financial activity of the grouping, there could be no doubts as to the steep rise of the dollar.
Thus, steady rise of USD/CHF higher than 1,2750 or even higher than 1,2880, will indicate significant change in investors’ sentiments and might take the market to 1,36, from where another global decline of the rate is possibly to begin.
Today, as there are no important news, market activity is expected to be low on the background of geopolitical news.
Taking into account all of the above-mentioned, we recommend purchasing USD/CHF, if the rate steadily rises higher than 1,2766. In case the rate goes higher than 1,2860 and 1,2880, one should strengthen purchases. Strategy target of purchases is 1,3600. Closest target, after overcoming the indicated levels, will be the level of 1,3060.
However, we do not exclude that there might be repeated decline of the rate, which would be limited by last day’s level (1,2515), prior to its global rise. The given decline seems to be improbable, in case the rate steadily rises higher than 1,2770, that is why protective stops should be arranged at 1,2550.
Those, who opened long positions on USD/CAD from 1,3280, we recommend keeping them. Stops are arranged under 1,3235. Target of purchase: 1,39 – strategy one and 1,3250 – the closest one.
Taking into account all of the above-mentioned, we recommend purchasing USD/CHF, if the rate steadily rises higher than 1,2766. In case the rate goes higher than 1,2860 and 1,2880, one should strengthen purchases. Strategy target of purchases is 1,3600. Closest target, after overcoming the indicated levels, will be the level of 1,3060.
However, we do not exclude that there might be repeated decline of the rate, which would be limited by last day’s level (1,2515), prior to its global rise. The given decline seems to be improbable, in case the rate steadily rises higher than 1,2770, that is why protective stops should be arranged at 1,2550.
Those, who opened long positions on USD/CAD from 1,3280, we recommend keeping them. Stops are arranged under 1,3235. Target of purchase: 1,39 – strategy one and 1,3250 – the closest one.
The forecast was created by trans1.
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