While the traders and economist are getting ready to say goodbye to summer in style and welcoming the long weekend, Russian military invasion talks caused a considerable flight to safety in gold, the Swiss franc, the Japanese Yen and the Dollar.
Nato have said that Russia now has more than 1,000 troops inside Ukraine and 20,000 “far more capable” troops on the border than the ones that were there back in March. The conflict could see Europe bearing the financial brunt
Currency Pair to Watch: EUR/CHF
The Swiss look like they’ll be having an expensive time in defending their exchange rate cap versus the Euro if this continues, as investors move to the Swissie in times of uncertainty (of which there have been many from Europe in recent times). As we have seen over the years, the Swiss need to keep the EUR/CHF exchange rate above the 1.20 level, and in the past few weeks we saw a rapid decline towards this level. . Markets took the currency pair to within 0.5% of the 1.20 level yesterday and the Swiss have reiterated that they are ready to intervene in the market if necessary. With the prospect of QE in Europe and protracted problems in Ukraine, the Swiss might want to think of other strategies to weaken their currency for the longer term. They have a meeting on the 18th September which will be watched a lot more closely than normal if problems persist.
So here at Invest diva we already have our bullish entry ready at 1.20 because once we hit that level, chances are the Swiss would do everything they can to divert the EUR/CHF pair.
Friday’s Fundamental Recap
In a little more optimistic news, the Canadian GDP came our better than expected at 0.3%, and the UK’s GFK consumer confidence index posted last night showed that August was as upbeat as June, which was at a nine year high. The US session started with a bunch of US data including inflation, personal spending and the Michigan survey. The US will close early today as it’s the Labor day weekend and isn’t openon Monday. Month end flows could mean a little more excitement as we head into the close of the week.
Short Term Technical Analysis
EUR/USD 4-hour: Consolidating.
Invest Diva Likes: Short positions below 1.3187 with targets at 1.3159 and 1.3120 in extension.
If Pair Goes Nuts: Above 1.3187 look for further upside towards 1.3215 and 1.3245.
What’s up on the Forex Dance Floor: The pair is on an overall downtrend but is now consolidating in the middle of the Bolinger band. Market sentiment of one of the largest international brokers shows that 66% of traders are long the pair and the combination of the technicals and current sentiment gives a further bearish bias.
Supports and Resistances
1.3245
1.3215
1.3187 Pivot point
1.3159
1.3120
USD/CHF 4-hour: Consolidating.
Invest Diva Likes: Short positions below 0.9142 with targets at 0.9130 and 0.9112 in extension.
If Pair Goes Nuts: Above 0.9142 look for further upside towards 0.9155 and 0.9184.
What’s up on the Forex Dance Floor: The pair is consolidating after reaching the resistance level at 0.9155 above the Ichimoku’s cloud. The RSI is heading south from the neutrality area.
Supports and Resistances
0.9184
0.9155
0.9142 Pivot point
0.9130
0.9112
USD/JPY 4-hour: Moving up.
Invest Diva Likes: Long positions above 103.92 with targets at 104.25 and 105 in extension.
If Pair Goes Nuts: Below 103.92 look for further downside towards 103.62 and 103.22.
What’s up on the Forex Dance Floor: After hitting a support level at 103.62, the pair is moving up over the Ichimoku’s cloud with the RSI above the neutrality area.
Supports and Resistances
105
104.2
103.92 Pivot point
103.62
103.22
