Forex Alerts 10/14/2008

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Alert - 09:50 (CET) - Fed floods the markets with Dollars and UsdJpy climbs

The UsdJpy is trading at 102.35, ranging from 102.01 to 103.07. The current price is over yesterday's close at 102.01. Checking the hourly graphics, the 20- and 50-day Exponential Mobile Averages (EMA) are under the 200-day EMA.

The traders are watching the resistances at 105.15 (October 6th high), 108.02 (September 19th high) and 110.67 (August 15th high). The supports are set at 100.00 (key), 98.46 (March 20th low) and 95.75 (March 17th low).

Since last Friday's close at 97.91 that the UsdJpy has been moving away from its anual low at 95.75, as the Eurozone is preparing a coordinated bailout plan to the financial sector. This way, the credit markets are breathing again, after the Fed, and other central banks, flooded the money markets with Dollares, to increase liquidity.

In this context, the carry trades are regaining strenght, having been limited lately by the declines in the stock markets.

Meanwhile, the 60-minute Relative Strenght Index (RSI) is at 64 points, rebounding from the overbought area. The volatility per hour is 330 pips. Checking the graphics again, we see that the current price is under the 23.60% (130.80) and over the 0.00% (80.23) Fibonacci retracement lines.

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