Analyst Paul Ebeling of takes a look at USD, EUR, GBP, JPY

The US Dollar Index continues to stretch above the 80 level and 200-Day MA (80.35-80.77). The DXY has recovered all of it’s losses following the QE-3 announcement by the Fed. The USD has been bolstered by two better than expected jobs reports since the announcement which has led some to believe the program will not be as large (or long) as originally expected. There is also some safe haven demand helping boost the “Greenback.” Focus will turn to the Presidential Wlection with the general thought being that Mitt Romney would scale back the US Fed purchase program and thus provide a boost to USD’s strength.

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The EUR has slipped back below it’s 200-Day MA (1.2827-1.2877). There is a growing fear surrounding the Greek bailout with headlines this morning suggesting the November 12 Eurogroup meeting will still not see a decision on the next tranche. With Greece projected to run out of money on 16 November there is a fear of a default by the country. This week will set up as an important one as the Greek parliament is expected to vote on an its latest budget. The budget is seeing serious resistance from coalition partners over potential pension reforms. The ECB will also meet but outside of the possibility of a symbolic rate cut there does not appear to be a lot that the ECB can do at this point.

The GBP is following the euro lead and has tumbled below the key 1.60 support mark. Adding to the pressure was the latest Services PMI survey which came in lower than expected. 1.60 will remain a Key level this week for sterling. The Bank of England will meet Thursday, but there is little expected from the meeting.

The JPY continues to hold just above the 80 level against the dollar. This is a little surprising given some of the safe haven bids in markets, but it is more likely to do with the dollar strength ahead of a potential game changing election. News that electronics maker Sharp may request bailout support was the latest sign that the export driven economy is having problems with the high valuation of the JPY. The JPY is moving higher against the euro but still remains below the key 200-Day MA (101.45-102.10).


Paul A. Ebeling, Jnr.

Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.

Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.

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