The U.S. economy is in recession Forex and Dow Jones recommended levels EUR/USD - 1.3605 Daily Market Outlook - Oct 15 More EUR/USD Chart of the Day - 10/15/2008 - GBP/USD GBP/USD Technical Analysis 15 October 2008 Forexpros.com Daily GBP/USD Analysis - 15.10.08 More GBP/USD Forexpros.com Daily Analysis - 15.10.08 USD/CHF - Dollar Swiss Franc, European Session - 15/10/08 USD/CHF - Dollar Swiss Franc, American Session - 14/10/08 More USD/CHF

On Thursday, the U.S. government reported that the gross domestic product was stronger last quarter than initially estimated. This report helped spark an initial break in the EUR/USD. Tumbling crude oil prices later in the morning helped drive the Euro lower.

The reports so far this week show that the U.S. economy is not as weak as expected. There are signs of improvement, which is giving Dollar buyers confidence.

Hawkish comments by the Fed also helped accelerate the break in the Euro. Comments such as "inflation expectations should continue to worsen" and "I would expect a change of course in monetary policy to occur sooner rather than later" attributed to Federal Reserve President Richard Fisher, provided fuel for the Dollar's rally.

The Fed appears to be ready to act should inflation begin to affect consumer purchases. U.S. interest rates continued to rise, moving tighter against the Bund. This is sending money to the U.S. markets as global traders seek higher performing assets.

Technically, the market closed inside of a retracement zone at 1.5551 to 1.5487. If downside momentum slows down inside of this range, look for profit taking to begin as it would indicate that sellers are not willing to initiate new positions at this low level. If this becomes the case then wait for a rally back to 1.5653 to initiate new short positions.

USD/JPY Gains on U.S. Asset Buying

Traders seeking a better yield sold the Yen to purchase U.S. assets for a better return. As the U.S. economic picture begins to brighten and crude oil prices tumble, expect more buying in the USD/JPY. Traders have held back on their interest in the long side of this pair because of the uncertainty in the U.S. economy, but this week's reports have given Dollar buyers more confidence to initiate new long positions.

Technically, the USD/JPY broke out to the upside following several days of range bound trading. Once the market clears the two old tops at 105.44 and 105.71, the charts indicate a potential rally to 107.70. Look for the old tops to form a support zone. If this fails to hold, then wait for a pullback to 104.22 to initiate new buys.

GBP/USD Stalls on Strength of U.S. Economic Reports

The British Pound stalled in its attempt to breakout over this week's high at 1.5818. Traders noted the strength in the U.S. GDP number and talk of a Fed interest rate hike later in the year as key factors preventing fresh buying at current levels.