yen and euro calls reviewed

...the candles were dollar bulls on both eur/usd and usd/jpy this past week. the close of the week sees one good call (sell eur/usd) and one bad (buy usd/jpy). however, the balance sees our weekly forecast rating in positive territory.

the recently rampant euro struggled against most currencies this week, most notably falling the most against sterling since the euro's inception 10 years ago. the dollar was no exception: the euro opened the week at 1.3905 and promptly started falling to hit 1.3311, only to rise again against a backgound of weak US data, closely followed by the FOMC meeting minutes which showed the Fed in a distinctly downbeat mood. the rise continued until US NFP came in less worse than many on the floor feared. the dollar strengthened accordingly to close the week 476 pips down on the week at 1.3429. this gives a forecast rating of +3.54%
usd/jpy also kicked the week off in the right direction, but the move was scuppered on Tuesday too. Friday's NFP couldn't do enough and the pair fell 184 pips over the week to close at 90.22, leaving us with a forecast rating of -2.03%

the rating total for the week is, therfore (3.54 - 2.03) +1.51%, which makes the running total (11.90 + 1.51) +13.41%.

fed fireworks end the year with a bang

so the fed put up their hands and admitted their inability to fix rates, opting instead for a range of between 0.00% and 0.25%. they said that the economy was in a terrible state and would be for 'some time' to come. they promised seemingly unlimited injections of cash to fix the problem. [gulp] we can only wait to see what 2009 brings...
the best round up of the fed's actions on Tuesday was in this Financial Times article: Fed slashes rates to near zero . I'd recommend watching the John Authers video report in the article. It's a clear concise (albeit sobering) rundown with a rather endearing touch at the end.

candle calls for this week (calls on eur & chf)

...this week is the last full trading week of 2008 and should prove to be full of interest. the fed are ensconced behind closed doors as I write and will announce their interest rate tomorrow, 19:15 gmt. the consensus is for a further 50bps cut to 0.50%.
the other big story this week will no doubt be the US Treasury's move to save the US auto industry from collapse. it's all very vague at the moment and this week should see the answers to the main questions:
how much?
from where? (george w said that using the tarp funds was a 'possibility')
and for how long? (most likely until obama takes the helm)

...as I was saying yesterday we've two calls:
eur/usd (dec 1-5 & dec 8-12): last week's long white confirmed the doji of the week before and could possibly mark the breakout of the narrowing range that eur/usd has been trading in for the last 6 0r so weeks.

forecast: the euro looks set to continue its recovery.
support: 1.3290
resistance: 1.3645




usd/chf (dec 8-12): the franc woke up and last week's impressive long black leads us to expect more downside action this week.

forecast: the candles remind us that december is often difficult for the dollar.

support: 1.1605
resistance: 1.1920




usd/jpy (dec 8-12) last week's long spinning top charts downside pressure as traders ran for cover. However, the dollar rally at the end of the week marked speculation that the BoJ would intervene to weaken the yen. Japan's finance minister left me no wiser on friday and that long lower shadow on the candle bodes caution.

forecast: the candles caution against pitting your account against the BoJ!
support: 89.0
resistance: 93.0


gbp/usd (dec 1-5 & dec 8-12): sterling tried to strengthen but couldn't break resistance at 1.50 and spent the week inside the previous week's range. Although the bias seems to be on the downside, the candles are holding their horses.

forecast: the candles are watching this ugly-contest with interest
support: 1.4660
resistance: 1.5150