FOREX TRADING

Market Outlook

Tactical view:

• GBP: selective gains targeted on AUD, CAD underperformance

Selling rallies in pro-risk and carry trade strategies is favoured in G10 currency markets and should translate into steady demand for safe haven harbours. We look ahead to next Tuesday when Japanese PM Kan will announce a plan to support the economy and tackle the JPY. With the SNB not explicitly targeting a level for the CHF, we wonder if safe haven dynamics may turn even more overwhelming in favour of long CHF positions. Next week also features US non-farm payrolls and the G7 meeting, promising a lively run in to September. If the relentless deterioration in the US economy observed this month is echoed in Friday’s non-farm payrolls, then a precipitous sell-off in risk and AUD, CAD and NOK could follow. For EUR/GBP to progress towards the June lows, we look for resilience in the UK August PMIs and the ECB to extend unlimited liquidity operations until year-end.

(more…)

FX Thoughts for the Day

USD-CHF @ 1.0072/75…Holding Short. Tighten Stop

R: 1.0101-13 / 1.0134-35 / 1.0184-93
S: 1.0031 / 0.9928 / 0.9886

Dollar-Swiss did correct towards 1.0122 during the day beyond the Resistance zone indicated in the morning. It has however come down now after the second level Resistance of 1.0121-34 held on. It can now come down further towards the Projected Max Low for the day at 1.0031 during the US session as was mentioned in the morning.

(more…)