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Intra-day Forex volatility is rising

By Marc Spaelti - ACM Senior Trader Yesterdays News and Events: The Dollar started weak on Thursday, sentiment is turning against the greenback on fears of slowing economic growth, stalling interest rate hikes and the squaring of ???crisis-positions??™. EURUSD traded up to a 2-week high of 1.2775, Cable fared better once again achieving a 1.8675 high, highest level since early June and a step towards its medium-term target of 1.90. The Swiss Franc underperformed, unable to convincingly breech its 1-month rising support at 1.2330. In the New York session the tide turned, Jobless Claims fell to 298k, the lowest level in 6 weeks and June Durable Goods Orders rose a higher then expected 3.1%, currencies were sold and the days opening levels where bypassed fairly easily. The Dollar spike continued into the Asia session to reach lows of 1.2675 EURUSD and 1.8545 for the British Pound. The Japanese Yen very much followed the other exchanges, going for a first test of the medium-term Dollars support-line at 115.30 before returning to slightly above 116. Government Spokesman Abe, a known dove, commented the eighth straight rise in CPI, which pushed YoY price increases to just 0.6% as only one piece of information that they were monitoring before the end to deflation could be declared. In view of the recent 25bp BOJ rate hike, we believe any further rate adjustments would be done in late autumn at the earliest. Todays Key Issues: Swiss July KOF Leading Indicator is due at 9.30GMT, it stood at 2.5 last month, no forecast available. The US will do the 1st release of the 2nd Quarter GDP data at 12.30GMT. After a strong 5.6% increase in the first quarter, expectations are for a much slower 3%, ???eaten away??™ by a price deflator of 3.5%. Employment costs should increase a steady 0.8%. At 13.50GMT the Final July University of Michigan Sentiment Index is forecast to remain unchanged at 83. The Risk Today: 4-H EURUSD: Presently at 1.2685, the strong 1.27 resistance is a hurdle early in Europe. While underneath we risk widening the current dip to 1.2650 or as low as 1.2605, 10-day bullish trend. 1.27 acting as a pivot, a break should witness fast ascension back to the 1.2770 top and a chance to go for the July high of 1.2860 4-H USDJPY: The pair has touched the medium-term trend-line at 115.30 for a first time in 3-weeks. While we allow for intra-day dips to 115.10, the downside may be very limited after three days of selling. Short-term bearish trend-line at 116.10 will advance to 115.85 by tonight, higher weekly close points to a retest of the 117.00 key-resistance early next week. Closing underneath of the (orange) medium-term trend-line however is very bearish, a rapid fall to 113.50 would be expected. Daily USDCHF: Here too we see that medium-term Dollar-support is intact, the pair quickly bounced after scratching 1.2330 yesterday morning. Unlike the Euro and Cable, the medium-term picture remains bullish for now and it really should go for a re-test of 1.2530, on the other side a weekly close underneath of 1.2260 points to 1.20. Printer-Friendly Version Send This Page Add to Favorites Comments Prev All News Category News Next