Currency snapshot (major pairs)

Dollar index trading at 95.82 (+0.32%)

Strength meter (today so far) – Euro -0.41%, Franc -0.66%, Yen +0.05%, GBP +0.07%

Strength meter (since last week) – Euro -0.42%, Franc -0.36%, Yen -0.43%, GBP +0.12%

EUR/USD –

Trading at 1.117

Trend meter –

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

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 –

• Consumer price index for September came at 0.4 percent with core at 0.8 percent.
• Unemployment rate for August came at 10.1 percent.

Commentary –

• The euro continues to trade within a small band. 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 1.298

Trend meter –

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

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 –

• Nationwide house prices grew by 5.3 percent y/y in September.
• Second quarter GDP was better than expected. It grew by 0.7 percent in the second quarter.

Commentary –

• The pound scaled back gains but still the best performer this week. In the short term, we expect the pound to drop towards 1.2 area. We expect the pound to reach parity.

USD/JPY –                      

Trading at 101.1

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 –

• Vehicle production grew 8.8 percent from a year back last month.
• Housing starts grew 2.5 percent y/y in August.

Commentary –

• The yen hasn’t gained much despite the problems occurring in European banks.  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 0.973

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 –

• KOF leading indicator improved to 101.3

Commentary –

• Franc is likely to move in line with the euro this week. We expect Franc to strengthen against Dollar to as high as 0.86 area in the medium term.