THE TIPSTER
YESTERDAY the dollar hit a 15-year low against the yen. Much has been made of the effect this will have on the Japanese recovery. Monday saw the Bank of Japan announce that interest rates will remain unchanged, and that the quantitative easing programme will not be extended to defeat deflation. Some think that the yen is likely to weaken in the next few months with resistance remaining at ¥84.55 – traders who agree should buy at that level. The current Cantor Index price is ¥83.83-¥83.85. On the other hand some analysts stress the Bank of Japan’s impotence and expect the yen to strengthen even further. Spreadex offers a spot price for dollar-yen of ¥83.72-¥83.78.
Germany factory orders have slowed, spelling economic vulnerability for the Eurozone, but at a time when the outlook is equally bleak for the UK, the euro is holding up well against the pound. Unless sovereign debt issues or ratings downgrades begin to resurface in the Eurozone, any weakness in the single currency is likely to be capped at €0.8300. The current IG Index price is €0.8328-€0.8331.
Cable hit a six and a half week low of $1.5296 on Monday after it broke through support at $1.5350. However, the dollar did weaken late in the European session, allowing cable to retrace back to the $1.5345 region. Sterling-dollar does look to be in a bearish downtrend and $1.5350-$1.5400 should act as resistance in the near term so look to sell around these levels with a target of $1.5150. Spread Co offers a spread on sterling-dollar of $1.5338-$1.5341.
Every time dollar-Swiss franc aims for parity, the rally is met with fresh waves of selling. A downtrend resistance line has been in place since the beginning of August, currently sitting at around SFr1.0140 to the dollar. Traders should sell SFr1.0140-SFr1.0170 for a target of SFr1.000. Spread Co offers a spread of SFr1.0117-SFr1.0120.