The Week Ahead - Oct 10 EUR/USD - Euro Dollar, American Session - 10/10/08 EUR/USD - 1.3609 Daily Market Outlook - Oct 10 More EUR/USD The Week Ahead - Oct 10 GBP/USD - British Pound Dollar, American Session - 10/10/08 Shock and Awe for Markets All Around the World! More GBP/USD USD/CHF - Dollar Swiss Franc, American Session - 10/10/08 USD/CHF - Dollar Swiss Franc, European Session - 10/10/08 USD/CHF - Dollar Swiss Franc, American Session - 09/10/08 More USD/CHF

The EUR/USD rallied on Wednesday as traders worked out of long Dollar positions as financial losses at Fannie Mae and Freddie Mac led to speculation that the U.S. financial market crisis is worsening. Despite an attempt by Fed Chairman Bernanke earlier in the week to boost the Dollar by extending discount window lending to investment banks indefinitely, the Dollar could not follow through. This is definitely a sign that the U.S. financial markets are under serious pressure.

Adding to the bearishness was ECB President Trichet's comment before the European Parliament in Strasborg, France, that the level of inflation is "worrying." Throughout the day, Euro Zone financial traders increased bets that the ECB will raise borrowing rates to stop inflation from accelerating. The yield advantage has widened which makes the Euro a more attractive investment than the Dollar.

Key support is at 1.5682. On the upside, the market appears poised to rally to 1.5795 to 1.5809.

The USD/JPY fell on the weakness in the U.S. stock market. Credit problems are the issue as more financial institutions are expected to post additional write-downs. The stock market reacted bearishly as the issuance of Fannie Mae debt yielded a spread over benchmarks. This action helped accelerate the USD/JPY to the downside.

According to the charts, the close under 106.97 puts the market in a weak position. Look for major support at 106.11. Resistance comes in at 107.05.

The GBP/USD should have been down on bearish fundamentals such as weak service and manufacturing sectors. This was not the case, however, on Wednesday as the British Pound rallied. This is a clear indication of how weak the U.S. financial markets actually are. Look for the Bank of England to leave borrowing costs unchanged.

The charts indicate strength as the market closed above support at 1.9788. Look for this rally to continue into a retracement zone at 1.9828 to 1.9870. Downtrending resistance is at 1.9868 forming a resistance cluster at 1.9868 to 1.9870. This resistance cluster is the best sell area today,

The USD/CHF could not hold the rally above the resistance zone at 1.0326 to 1.0376 as traders got a little nervous holding longs while the stock market was breaking. Traders sold Dollars and bought Swiss Francs in a flight to quality action.

New resistance drops down to 1.0351. The first support level is 1.0310, followed by 1.0210. Retracement zone support is at 1.0231 to 1.0202. The charts indicate the next downside target is the support cluster at 1.0210 to 1.0202. With the main trend up, look to be a buyer in this zone.

The USD/CAD fell on news that the Canadian housing starts exceeded economists' forecasts. This triggered a sharp drop in the U.S. Dollar versus the Canadian Dollar. The bullish news is a sign that the Bank of Canada is not likely to hike rates this year.