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Forex · News · Forex ForecastsNEWS / Forex Forecasts |
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What would the old man say?…Forecast on the dynamics of USD/CHF and USD/CAD rates.
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09:16 04/20/2004
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What would the old man say?…Forecast on the dynamics of USD/CHF and USD/CAD rates.
We once again want to remind you that the main intrigue of the last days is the possibility of the increase of major FRS interest rate that might occur soon.
Expecting that event, or expecting information that would throw light on decision-making possibility, had pushed aside Iraq and the Near East events.
Even the Saturday assassination of the new leader of Palestinian Hamas movement did not inspire EUR-USD rate to break the key level of resistance at 1,2080-90.
Let us remind that Friday events had unexpectedly shook the whole situation with dollar buyers, who started intensively purchasing dollars “on rumors” against the European currencies.
Despite unexpectedly weak data on consumer confidence and industrial production, there is still a hope that FRS would increase the rate soon.
The address of the FRS head Greenspan is likely to ruin or to strengthen those hopes. The address is planned for Wednesday, which is today. Market participants impatiently wait for Greenspan’s estimation of the U.S. economy. Investors will make conclusions as to the possibility of FRS rate increase, according to the content and the overall tone of the comments.
Besides, regular meeting of ministers of finance and the heads of Central Banks of G7 will take place this Friday and Saturday in the capital of the United States. Though the discussion of currency market situation is not actually planned for, countries leaders’ statements might affect market sentiments and the dynamics of exchange rates.
Technically, current USD/CHF situation points at prevalence of “bull” sentiments. Thus, breaking-out of the key level of resistance 1,3065 presupposes rate rise with the following targets: short-term target 1,3280; medium-term target 1,3420; strategy target 1,3620. Meanwhile, it can also go deeply down (to 1,2740, as a minimum) due to nearness of such important level and impossibility of overcoming it, shown during the whole previous week.
USD/CAD seems to have already chosen the strategy direction and now we should only wait for descending correction of the rate for long-term purchases.
The significance of the address of FRS head can hardly be overestimated in current situation. It can only be compared to FOMC meeting. That is why we recommend not taking risk, as the words of the head of FRS can be interpreted differently. Wait for the market reaction to the address.
The significance of the address of FRS head can hardly be overestimated in current situation. It can only be compared to FOMC meeting. That is why we recommend not taking risk, as the words of the head of FRS can be interpreted differently. Wait for the market reaction to the address.
The forecast was created by trans1.
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