Daily Analysis
iFOREX | Dec 25, 2008 07:00PM ET
EUR/USD looked generally bid after early weakness on the day following Christmas. From an early low of 1.3990, the pair scooted higher on presumed buying by a large Asian name out via Singapore (Singapore was the only major FX center aside from Tokyo open) to $1.4059 before easing off. Some light trader stops were tripped on the break above $1.4050. More are seen above resistance at $1.4100 and $1.4125, the latter the high on the 22nd. Bids below are concentrated around the $1.4000 area now and look to trail down to $1.3950. Some stops are seen below this level but will unlikely come under much scrutiny given sentiment again favoring a weaker USD.
USD/JPY traded up from an early low of ¥90.34 to ¥90.84 before being capped by Japanese exporter and other offers ahead of ¥91.00. The talk is offers from exporters at ¥91.00 and above are very large, and look to cap USD/JPY going forward despite talk of some trader stops mixed in above. USD/JPY later came off towards earlier lows on general USD weakness. JPY crosses remained relatively buoyant after initial surges higher with the Nikkei buoyant on better than expected sales and spending data.
2008 was an extremely volatile and unpredictable year within the foreign currency markets. We saw the GBP/USD exchange rate drop over 25%, the GBP/EUR exchange rate drop over 20% and the EUR/USD exchange rate drop over 20%. There is no point in me talking about the reasons behind the credit crisis as we have all heard it many times before.
So what is on the cards for 2009?
For a while now, the currency markets have been extremely difficult to predict and I certainly cannot see that changing. In the short term at least, things will continue to be volatile
Happy Holidays!
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