Currency snapshot (major pairs)

Dollar index trading at 94.84 (-0.06%)

Strength meter (today so far) – Euro -0.1%, Franc +0.14%, Yen -0.02%, GBP +0.30%

Strength meter (since last week) – Euro +0.86%, Franc +1.06%, Yen +2.13%, GBP +0.62%

EUR/USD –

Trading at 1.124

Trend meter –

• Long term – Sell, Medium term – Sell, Short term – Sell

Support                      

• Long term – 1.06, Medium term – 1.08, Short term – 1.09            

Resistance –

• Long term – 1.16, Medium term – 1.143, Short term – 1.132

Economic release today –

• NIL

Commentary –

• The euro is higher on weaker dollar, focus is on ECB tomorrow. Active call – Sell EUR/USD at 1.116 with stop loss at 1.15 and target at 1.01. However, in the short run, Euro might ride higher.

GBP/USD –

Trading at 1.337

Trend meter –

• Long term – Sell, Medium term – Sell, Short term – Sell

Support –

• Long term – 1.2, Medium term – 1.27, Short term – 1.29

Resistance –

• Long term – 1.39, Medium term – 1.35, Short term – 1.34

Economic release today –

• Halifax house prices declined 0.2 percent in August, still up 6.9 percent from a year back.
• Manufacturing production declined by 0.9 percent in July, up 0.8 percent from a year back.
• Industrial production is up 0.1 percent in July, up 2.1 percent from a year back.
• Inflation report hearings will begin at 13:15 GMT.
• NIESR GDP estimate will be released at 14:00 GMT.

Commentary –

• The pound is the worst performer today, hit by industrial production data. We expect the pound to reach parity.

USD/JPY –                      

Trading at 101.6

Trend meter –

• Long term – Sell, Medium term – Range/ Sell, Short term – Sell

Support –

• Long term – 91, Medium term – 98, Short term – 98

Resistance –

• Long term – 111, Medium term – 107, Short term – 107

Economic release today –

• Second quarter GDP data will be published at 23:50 GMT, along with current account balance for July.

Commentary –

• The yen turned out as the best performer of the week.  Active call – Buy Yen @119.5 with stop loss around 123.8 and target at 114 and 110, 108.9 and 98.5. All targets reached, new target 90 added. Yen may retrace to 111 per dollar if BOJ intervenes.

USD/CHF –        

Trading at 0.969

Trend meter –

• Long term – Buy, Medium term – Range, Short term – Range/Sell

Support –

• Long term – 0.9, Medium term – 0.927, Short term – 0.95

Resistance –

• Long term – 1.037, Medium term – 1.01, Short term – 0.994

Economic release today –

• Swiss FX reserve grew to $627 billion.

Commentary –

• Franc is up, contrasting with euro on FX reserve data. We expect Franc to strengthen against Dollar to as high as 0.86 area in the medium term.