FXToday The latest FX analysis
Premium global currency market subscription - with exclusive free trading strategies.
Keep ahead of the turbulent currency markets. FXToday's premium subscription gives you the expert analysis and the information you need for day-to-day successful decision making in the currency markets. The analysis is essential reading for all currency-market participants.
You also receive exclusive additional medium and longer-term trading recommendations/signals at no extra cost.
The full analysis is E-mailed to you daily by 11.00 GMT.
Principal benefits:
Each day, you receive the latest independent and professional currency analysis. Coverage of the US dollar, Euro, Yen, Sterling, Swiss franc, Australian dollar and Canadian dollar.
Calendar and consensus forecasts for the key economic data releases.
Exclusive, medium-term market trading strategies are included at no cost. These will not be posted on the website.
Exclusive, long-term trading strategies offering powerful returns are included at no cost. These will not be posted on the website
A subscription to the daily analysis is available for just US$39 per month. To subscribe now, please click on the Paypal subscribe button below.
If there are any difficulties, please contact info@fxtoday.co.uk
Refund policy. Please note that once we have have sent an issue as part of the subscription, we are unable to offer you a refund on the subscription for that month.
Daily market analysis 23rd May 2008
Key economic releases over the next 24 hours
| Time (GMT) | Data release/event | Previous | Consensus |
| 14.00 | US existing home sales | 4.93mn | 4.86mn |
Key factors to watch
The US housing data will be watched closely on Friday and any increase in sales would help underpin the dollar.
European and US official comments on the dollar and Euro will be very important for the markets over the next 24 hours.
Oil and gold-price trends will continue to have a very important influence on the major currency pairs.
Liquidity issues could trigger erratic trading in New York on Friday ahead of market holidays on Monday.
10.00 AM GMT Overall strategy: The relationship between energy prices and major currency trends is likely to remain strong in the short term. There will be a further temptation for markets to push commodity prices stronger and sell the dollar given the momentum that has built up. Nevertheless, there is now a clear risk of a sharp correction within the next few days given that positioning is likely to be over-extended and there is very little value in selling the dollar at levels above 1.58 against the Euro.
Trade suggestions for the next 24 hours
New positions
Medium term, buy EUR/CHF at 1.6050 target 1.6250 with a 1.5980 stop loss
Long term, sell EUR/JPY at 164.20 target 155.0 with a 166.20 stop loss
Long term, sell EUR/USD at 1.5825 target 1.5320 with a 1.6060 stop loss
Existing positions
Medium term, stay short GBP/USD from 1.9840 target 1.9430 with a tight 1.9826 stop loss to protect gains
Medium term, stay short EUR/GBP from 0.7980 target 0.7810 with a 0.8066 stop loss
Medium-term, stay long USD/CAD from 1.0020 target 1.0250 with no stop loss for now
Long term, stay long GBP/CAD from 1.9510 target 2.0250 with no stop loss for now
Medium term, stay short NZD/USD from 0.7820 target 0.7350 with a 0.8025 stop loss
Once a position moves into profit by 60 pips, we will assume a trailing stop loss has been placed in at 30 pips from entry. We encourage investors to formulate their own stop-loss policies according to their own preferences and risk tolerances.
Market analysis
Although there will be some further optimism that a further downturn in the US economy can be avoided, confidence will remain fragile with fears that high energy costs will ensure a weak economy with increased inflation. In this environment, Fed plans to keep interest rates on hold will not have a strong positive impact. There will be further concerns over the Euro-zone economy which will lessen the potential for Euro support. Oil=price trends will remain very important in the short term and the dollar will tend to be subjected to renewed selling pressure if oil prices rise again. Volatility levels are liable to increase, especially with market holidays on Monday.
The yen will gain some support from any increase in risk aversion and any renewed decline in global stock markets. Overall credit spreads are, however still narrower than during April which should curb yen buying and there is also evidence of increase retail yen selling. . There will be further speculation that the Finance Ministry is likely to discourage aggressive gains for the Japanese currency from levels much beyond the 102 region. Overall, there is scope for some further dollar support below the 103.0 level against the yen with resistance on an approach to 105.0.
Confidence in the UK economy will remain weak with fears over recession likely to increase, especially in view of the damaging impact f high energy prices. The UK currency will gain some support on yield grounds, especially as credit-related fears are still at a reduced level. Overall, the Euro still offers little value at levels above the 0.80 level against the UK currency. Sterling is unlikely to make much further headway against the dollar.
The Swiss currency will gain defensive support from any renewed downturn in equity prices triggered by stagflation fears in the global economy. Overall credit-related fears should remain at a reduced level which will lessen the potential for substantial franc buying. Overall, there should be firm short-term dollar support below the 1.0250 level against the franc. The Euro will offer significant value on any dip towards 1.60 against the franc.
The Australian dollar hit resistance close to the 0.9650 level against the US currency on Thursday and dipped lower to the 0.9550 level in New York. The overall tone remained corrective in local trading on Friday, but the currency was able to resist further losses with consolidation around 0.9580. The near-term currency moves are likely to remain influenced strongly by trends in commodity prices and risk appetite. Overall, there is scope for a further underlying correction weaker in the Australian currency.
The Canadian dollar was unable to extend gains on Thursday with resistance close to the 0.9830 level against the US currency and it weakened to lows around 0.9870 in Europe on Friday. The domestic retail sales data was weaker than expected which will tend to undermine the currency in the near term as underlying sales were little changed over the month. Oil-price trends will continue to remain a very important factor in the short term which is liable to trigger further volatility. The overall risks suggest that the Canadian dollar is liable to weaken slightly further in the short term, although the overall positioning suggests that heavy Canadian dollar losses will be avoided.
Disclaimer: FXToday's market analysis is not investment advice and must not be taken as recommending particular market positions. FXToday can take no responsibility for any actions taken by investors.