It was reassuring to watch the BBC World news channel at the weekend. More than two days after his untimely demise the death of Michael Jackson still monopolised the headlines. Nothing about the recession, no mention of MPs’ expenses or company bankruptcies, scarcely a nod to swine flu or bank regulation, just Off The Wall-to-wall Rockin’ Robin. Things are returning to normal at last.

US Dollar
Having held firm three weeks ago the technical support at $1.58 looks solid. Unfortunately, the resistance at $1.67 looks equally rigid. The break, when it comes, is more likely to be upward than downward but that does not remove the need for protecting the downside. Buyers of the dollar should place a stop order somewhere south of $1.58 and be patient. The cautious strategy is still to buy now half the dollars you will need. If you feel comfortable in doing so, leave a larger percentage uncovered in anticipation of a proper rally but do not forget that stop order.

Euro
In sterling’s current mood it seems able – though maybe not without some effort – to push through every obstacle in its way. The dip a fortnight ago almost to ?1.16 suggests that level is the new support line. The next obvious obstacle is the psychological one at ?1.20 (although ?1.19 poses a barrier of its own). Beyond that, the more important technical resistance is the early December high in the region of ?1.2150. Buyers of the euro should bide their time, using a stop order to protect against a reversal.

Support and Resistance levels
When watching the currency markets, a foreign exchange dealer will monitor movement within a range. This range is determined by 2 indicators, support (low) and resistance (high) levels. For example, the current range of the Euro would be 1.16 to 1.20. As a buyer, you would look to purchase your currency at the higher end of this range. Imagine support and resistance levels as a room with a floor and ceiling, and the exchange rate as a rubber ball. The ball will bounce off the floor and hit the ceiling, and bounce back down to the floor, back up to the ceiling and so on. At some point, the ball will break through either the floor (support), or the ceiling (resistance). In the real world, the support or resistance level is weakened by data coming out of the market, such as retail sales figures, consumer confidence data, interest rate announcements etc. If there is enough positive or negative data, the exchange rate will break either the support or resistance level, and begin trading within a new range. Your foreign exchange dealer will use their currency market knowledge to provide you with guidance, helping to protect you from negative movements and enabling you take advantage of the positive ones.

Colordarcy VIP Members can directly contact Mr. Deane Roe, Account Manager at MoneyCorp and he will discuss the options that are available to you. Please call him on: +44 (0) 207 828 7000 or email: deane.roe@moneycorp.com and quote reference: Colordarcy10.

To register with Moneycorp now, click here – http://www.moneycorp.com/CFX/?ReferringAgentID=10147610

Kind regards

Deane Roe
Account Manager
MoneyCorp

This entry was posted on Sunday, July 5th, 2009 at 2:06 pm and is filed under Hot News, News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.