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Forex Alerts 11/3/2008

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Alert - 09:30 (CET) - EurUsd



WIth the stocks in Asia and Europe starting with the right foot, the Euro is doing the same against the Dollar. The fact that the interbank lending rates in Asia are declining brings tranquility to the credit markets, triggering an appetite for high yielders.

From the macroeconomical field, the EurUsd will be keeping an eye on the today's results from the manufacturing sector PMI from Germany and the Eurozone. If the sector show a contraction bigger than expected, the Euro could become more pressured. This Thursday, the European Central Bank will cut rates by, at least, 25bp, to stimulate the economy and the credit markets.

Meanwhile, from the US, the major will be responding to what happens to the manufacturing sector and the construction spending. These data will be key to evaluate how battered the first economy is, as October was one of the worst months of its history. Depending on how bad these data are, one could speculate about cuts in the interest rates by the Fed.

The EurUsd is trading at 1.2792, ranging from 1.2722 to 1.2898. The current price is over yesterday's close at 1.2726. Checking the hourly graphics, the 20- and 50-day Exponential Mobile Averages (EMA) are over the 200-day EMA.

As the supports at 1.2500 (key), 1.2324 (January 2006 high) and 1.2000 (key). The resistance at 1.2733 (October 23rd high) was broken, so the traders are watching the next at 1.3000 (key) and 1.3353 (October 21st high).

Meanwhile, the 60-minute Relative Strenght Index (RSI) is at 40 points, rebounding from the overbought area. The average volatility per hour is 460 pips. Going with the daily graphics, we see that the current price is under the 38.20% (1.3063) and over the 50.00% (1.2141) Fibonacci retracement lines.



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