Lookout for Intervention

It was the Swiss National Bank that came into the picture and surprised everyone when the bank saw that the strength of the USD / CHF were being heavily crossed with the USD / JPY. At the time of the intervention the price levels were dealing closest to its second lower bottom at around the 1.0629 levels.. The surprise move was just in time where most of the major participants were caught flat footed that the bank realized that it was time for them to come in and drove the prices at around the 1.1019 high and is currently working at the levels of 1.0938 as of this writing.

The initial objective is still 1.1380 which was our previous market view report dated the 8th of June 2009 in our website. This just shows the resiliency of the US Dollar strength in our previous blog on the 18th of June. It is on its way to the price resistance and may probably extend beyond the 82.35 psychological market price. The projection is in line with the time table that we have stated that it may be able to achieve this target within the next few weeks towards the 3rd quarter movement of the year.

With the prices of gold and oil supporting the positive out look on the dollar; plus the better than expected durable goods orders that came out, the USDX is really on its way up North with some corrective movements along the way. The USD / JPY may soon follow once some of the major players would opt to settle their heavily crossed positions against the USD / CHF.

In another scenario , the EUR / GBP cross would be favorable to trade where the potential of gains is much higher and more identifiable from the chart formations. Please see comparative chart analysis between the 4 hour and weekly EUR / GBP charts in candlestick bar.

The market view is a matter of analysis regarding market conditions and should not in anyway be considered as recommendation to buy or sell any foreign currency for that matter. Investors should consider their financial conditions and should consult a financial adviser before engaging in the Foreign exchange market.

Good Luck and Happy trading!