By Rcpl Forex

Currency Daily Update

GBP USD

DAILY CHART (03-10-2007)

COMMENTS: (GBP USD - 2.0419) Cable plummeted to the levels of 2.0367 yesterday; once again taking support near 38.2% Retracement and 21 Days EMA in the 4-hourly Chart (as seen in the chart above). Despite the weaker Pending Home Sales data of the US yesterday; cable could not sustain at higher levels. Currently cable is trading around 2.0420 levels where the daily & weekly stochastic is overbought and further cable may retrace to the levels of 2.0365 again. Breaking of this level can push cable to the levels of 2.0260.

STRATEGY: Look for opportunities to short at higher levels around 2.0450-470 levels with a target of 70-80 pips and stop above 2.0550 levels.

Technical Summary:

Resistance 2: 2.0650
Resistance 1: 2.0492
Support 1: 2.0360
Support 2: 2.0295

EUR USD

DAILY CHART (03-10-2007)

COMMENTS: (EUR USD - 1.4167) Euro, although moving in an upward price range corrected almost 100 pips to the extent of 1.4140 levels yesterday. Currently trading around 1.4170 levels; Euro is trading close to its trendline channel support. Breaking of 1.4135 levels on the downside could push Euro to the levels of 1.4050 and further. The key focus is on the ECB Interest rate decision tomorrow.

STRATEGY: Avoid initiating longs at current levels. Look for opportunities to short Euro around 1.4190 levels with a target of 50-60 pips and stop above 1.4290.

Technical Summary:

Resistance 2: 1.4350
Resistance 1: 1.4280
Support 1: 1.4135
Support 2: 1.4060

GOLD

DAILY CHART (03-10-2007)

COMMENTS: (GOLD - $735) Gold succumbed to weakness against dollar yesterday to the extent of $23 making an intraday low at $724. A reversal bar pattern was also formed yesterday and conformation of the same is awaited. The stochastic is still overbought and Gold may retrace to the levels of $720 (21 Days EMA). Breaking of this level on the downside can bring a deeper pull-back to the levels of $710.

STRATEGY: Look for opportunities to initiate shorts around $738-40 levels with a target of $7-8 and stop above $755.

Technical Summary:

Resistance 2: $748
Resistance 1: $740
Support 1: $720.1
Support 2: $705.5

USD CHF

DAILY CHART (03-10-2007)

COMMENTS: (USD CHF - 1.1743) Swissy weakened almost 100 pips to make an intraday low around 1.1775 levels yesterday. CHF is facing a strong resistance at the same levels from the 50% Retracement and 100 Days EMA in the 4-Hourly Chart). The stochastic is also showing slight upside for the pair and CHF may touch 1.18 levels. However, the outlook remains bullish for Swissy as long as its holds below 1.18 levels.

STRATEGY: Look for opportunities to short the pair around 1.1780-1.18 levels with a target of 50-60 pips and stop above 1.1900.

Technical Summary:

Resistance 2: 1.1885
Resistance 1: 1.1800
Support 1: 1.1680
Support 2: 1.1625

RCPL FOREX

DISCLAIMER

These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

FOREX : Foreign Exchange Market

FOREX is a word play on the term Foreign Exchange Market. It is a market for buying and selling of currencies from all over the world. Certainly, such transactions are bound to be voluminous. It is just an estimate that there are about transactions of $1.5 trillion USD on a daily basis in the FOREX. Now just compare this with the paltry $300 billion USD a day transactions for the US Treasury Bond and the $100 billion a day transactions for the US Stock Exchange.

The FOREX came into existence in 1971 when the fixed currency exchanges were abolished. Currencies no longer had fixed values after that; on the contrary, their rates (mostly taken in comparison with the USD) were fluctuating, and changed on a daily basis. Throughout the seventies and the eighties the FOREX grew steadily, showing more advancement in the later years. The market has stupendously grown from $70 billion USD a day to the staggering amount that it transacts today on a daily basis.

There are actually about five thousand trading institutions in the FOREX. These include international banks, central government banks such as the US Federal Reserve, and commercial companies and brokers for all types of foreign currency exchange. The best thing that shows the unbiased nature of the FOREX market is that it has no fixed headquarters anywhere – it operates primarily from all major cities like New York, Tokyo, London, Hong Kong, Singapore, Paris, Frankfurt, etc. One can even use the telephone or the internet to make the transactions. The major businesses at the FOREX are the buying and selling of products in other countries. Several transactions are also conducted from the currency brokers or traders who stand to make small profits with the daily fluctuations in the market.

Most of the FOREX business is centered on big banks and financial institutions, but it doesn’t mean that the FOREX is inaccessible to small investors. The recent changes in the financial regulations have effectuated this accessibility. Earlier, a minimum transaction size was required to conduct business with the FOREX. But the current rules have made it possible to break large inter-bank units into smaller bits. Each bit is worth as less as $100,000. This makes it possible to each individual investor through loans that are extended for trading, known as leverage. The ratio to control the lots is 100:1. This means, every $1000 USD will allow one to control $100,000 on the FOREX.

The benefits of trading with the FOREX are mentioned below:-

(1) Liquidity of Investments – As the FOREX is a huge market, the funds have a very high degree of liquidity. This is because of the presence of the international banks who provide their bids and carry out a large number of transactions on a daily basis. Therefore, there is always a buyer or seller for any type of currency.

(2) Highest Degree of Accessibility – The FOREX is open 24 hours a day for 5 days a week. Every Monday morning the exchange opens at Australian Standard Time and closes on Friday afternoon at New York time. Greater accessibility is provided because the transactions can be conducted from the person’s home or office.

(3) Open Market – At the FOREX, there are no secrets. All the fluctuations that occur in the market are made accessible to everyone at the same time. There is no insider trading in the FOREX.

(4) No Commission – There is no hassle of paying commission to the brokers in the FOREX. Here the brokers earn by setting up a difference between the buying price and the selling price of a currency, which is known as a spread.

It must be understood by now that for the FOREX to work effectively, the currencies must always be traded in pairs. For instance, the Japanese yen must be traded against the euro. When one kind of currency is sold, there should be another to be bought in its stead.

The profit happens because there is always mobility between the different currencies. Even if there is a miniscule change in the exchange rate, then it could mean substantial changes in the profits due to the large amount of money involved in the transactions. People are thronging to the FOREX and not any other institution due to the trust that they have in it. To add to the advantage, the market is absolutely well-advanced and uses sophisticated software for dealing out its transactions.

FOREX-DD : Forex Daily Analysis