Quiet Markets...

We can actually hear the echo of our deepest fears today in the markets! The European session was rather quiet with low volume as their major participants are still away for Easter. The minorities left in the markets, ahead of the US session are still pondering upon the future of exchange rates, is it possible the dollar has comeback or are we just about to see a new wave erupt and the dollar sliding further to new historic lows!

It's excruciating to lock in your vote on currencies at this stage as technically and fundamentally it has never been this foggy, especially when it comes to the single currency, and the possibility of a unified central banks intervention is not utterly ruled out; and to top fears the ECB are withholding their stance and are not commenting on recent developments even as we see the euro still flagging the headings to $1.60!

With as we said light volume the euro managed still to bounce of its lows as it couldn't penetrate the strong support levels at 1.5340s where it set its early intraday low rebounding to current levels seen near 1.5440s to set the high at the hour of 1.5455. After the correctional wave the euro led for the upside wave it managed to fulfill 38.2% Fibonacci levels which were strong demand levels for the euro and the extent of the upside wave will be confirmed when the euro successfully breaches the resistance level near 1.5558.

The royal pound was on the rise today after the correctional wave and the domestic fear to the extend of tarnished UK economy from the US recession prospects and financial markets meltdown will have on the economy, especially after growth projections were revised down further to now around 1.7% expected growth for 2008. Taking the Fibonacci Retracement for the recent upside wave that extends from 1.9361-2.0396 we find that the pound managed to rebound today from the strong levels at 1.9750s were the intraday low was set which also resembles the 61.8% for the correction taken, the upside reversal managed to breach the minor resistance at 1.9810s setting the high of 1.9844, while the upcoming strong level that determines the upcoming extent of the wave is to see a breach for the resistance levels at 1.9870s and 1.9920s respectively.

The Japanese yen is still strong against the dollar especially as it is still trading below the marginal level at 100 yen; as long as jitters fill the markets the yen will remain strong while fears of intervention is still emasculating the yen up to a certain extent off its seen lows at 95.0s, as the effect will largely be felt on the pair's levels. The USDJPY pair today was trading in tight ranges with upside seen bias to set the high at 100.14 yet failed to continue the upside wave to reverse the dollar gains trading near the opening levels at 99.58 which was the intraday low. Still the pair needs to break through the major resistance level ahead at 100.50s to confirm the upside while trading below provides momentum to attempt the support level at 98.70s which will further extend the downside wave if penetrated. On the other hand the yen weakened slightly against the euro and the pound as the pair set the highs of 154.39 and 198.61 respectively.

Crown Forex

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