What would the FRS U.S. members decide?…Rate dynamics and recommendations on USD-CHF and USD-CAD. by OpenForex.com

What would the FRS U.S. members decide?…Rate dynamics and recommendations on USD-CHF and USD-CAD.

10:23 08/10/2004

What would the FRS U.S. members decide?…Rate dynamics and recommendations on USD-CHF and USD-CAD. Despite disappointing Friday review of the U.S. Labor Market, the majority of analysts forecast that the FRS U.S. would raise base interest rate target 0,25% to 1,50% per annum. We suppose, it will be the last rate hike this year. Let us remind that the next FRS meetings are scheduled for September 21, November 10 and December 14. Now, prices consolidate after Friday rally and form classical “flag” pattern, which presupposes rise continuation today or tomorrow. Numerous intraday speculators got ready for selling USD-CHF from 1,2630. More conservative players put orders for selling the rate from the levels that are close to 1,2700. The majority of the players expect the FRS to raise the rate 0,25% and the given fact has already been considered by the market. Instead of supporting American currency, rate hike might cause continuation of weakening trend that showed itself on Friday. The level of 1,2400 and 1,2270 later on might become the next short-term target of such decline. Fall of key monthly support, the start of which was marked this January, will ruin the last hopes for long-term growth of American currency. Recommendations: as the last data on employment changed the disposition of forces among the seller and the buyers of American currency, we recommend arranging putout orders for selling USD-CHF rate on the level of 1,2595. In case correctional growth goes higher than the mentioned level, keep opened positions on selling the rate and add up at 1,2695, as 1,2720 will become the powerful barrier on the way of further rise of the pair. Our trade plan can be ruined if the FOMC members decide to raise rate target 0,5%, which seems to be almost impossible now, or if the after-meeting comments of the FOMC members hint at hike continuation later this year. The situation is similar with USD-CAD rate: sell rate from 1,3230, add from 1,3270 in case of rise. The critical mark here is 1,3310. The target of regular decline of the rate will be global support at 1.3050. Fall of support give way to new operative horizins. Recommendations: as the last data on employment changed the disposition of forces among the seller and the buyers of American currency, we recommend arranging putout orders for selling USD-CHF rate on the level of 1,2595. In case correctional growth goes higher than the mentioned level, keep opened positions on selling the rate and add up at 1,2695, as 1,2720 will become the powerful barrier on the way of further rise of the pair. Our trade plan can be ruined if the FOMC members decide to raise rate target 0,5%, which seems to be almost impossible now, or if the after-meeting comments of the FOMC members hint at hike continuation later this year. The situation is similar with USD-CAD rate: sell rate from 1,3230, add from 1,3270 in case of rise. The critical mark here is 1,3310. The target of regular decline of the rate will be global support at 1.3050. Fall of support give way to new operative horizins.

The forecast was created by trans1.