Amidst overwhelming pressure, the greenback gained some ground on what has been a tumultuous fall against other major currencies.The… … Fed has done its best to curb
any further down trends, but with rising concerns in the US economy it is uncertain
if anything short of a major announcement can change things. Unfortunately, much
speculation seems to tend toward the notion that a credit crunch similar to the one
from August will occur forcing the greenback down again.

The weekend's G-7 talks, produced responses from finance ministers and members of
the central banks that called for no action to be taken against the plummeting
greenback. As a result, investors changed sentiment regarding how far and how fast
the greenback was supposed to fall. The USD managed its biggest rally against the
EUR since 2005 as investors began to ponder whether or not a turn was in place.

US Treasury Secretary Henry Paulson will speak to today (12:30 GMT) at the US-China
Relations Conference in Washington D.C. The speech will focus on economic relations
with China and should not have a significant effect on the greenback's movement. As
the only scheduled US news event on the calendar today, it will be intriguing to see
if the greenback continues to strengthen after yesterday's push.

* EUR
The EUR had a volatile day yesterday, having to cope with movement from the US and
JPY. It managed to hit all-time highs against the greenback at 1.4348 before tailing
off at the day's end to as low as 1.4133. Monday's economic calendar was empty
regarding Eurozone news and left the EUR in the hands of global news events.

G-7 participants avoided statements that would touch upon the appreciating EUR. The
undeniable strength of the EUR has kept European finance ministers and the ECB quiet
about changes in economic policy.

ECB President Trichet has tried to echo sentiment that the greenback will find its
way back to normal ground, which is proving difficult amidst rising suspicions of
the problems in the US economy. However the resilient EUR is now beginning to come
under pressure after the recent string of negative Eurozone economic data coupled
with a slight shift of investor sentiment. It seems that the EUR bullish rampage is
beginning to lose steam and may setup a sharp reversal.

* JPY
The JPY has been in the middle of a whirlwind of news events regarding the volatile
movement of the greenback. After trading at six week highs against the greenback,
the JPY slowly dropped as was assumed it would. Due to unchanged interest rates it
was only a matter of time before a sell-off of the JPY occurred. Agreeing with that
sentiment, the G-7 gave the go ahead on selling the JPY to ease its demand within
the currencies market. Carry trades tailed off especially, due to growing concern
in the currency's volatility versus the greenback. The JPY was trading around the
113.50 against the greenback before the G7 meeting and then it slipped to the 114.48
level. The JPY has been on a strong uptrend of late as a result of the risk averse
sentiment among investors which has caused a carry trade unwind. However it seems
that the negative greenback sentiment may be on the brink of reversing, so this may
halt the bullish JPY momentum.

Technical News
* EUR/USD
A rising wedge is establishing on the 4 hour chart imply on a bearish trend which
may occur tomorrow .
Today , Slow stochastic and RSI have a positive slope suggesting the uptrend has
much room left to go.
The upcoming bullish trend is expected to test the 1.4250 level, and in case of a
breach we expect this pair to test the 1.4300 resistance level.
Today going long seems to be preferable.

* GBP/USD
An upcoming bullish trend is expected when daily indicators (Slow Stochastic
,Momentum and RSI ) have a positive slope .
First target price is at 2.0400, if a breakout will take place, next barrier is
located at 2.0473.
Going long seems to be preferable.

* USD/JPY
A 5 Eliot waves structure is establishing on the 1 hour chart offering this pair to
consolidate at 114.00 – 114.20 later today.
However in the next 3 hours we may see a slight strengthening of the greenback
before the reversal will take place.

* USD/CHF
The volatility has decreased and the USDCHF is in a bearish configuration. Dovish
moves without trend, and swings around exponential moving averages (EMA 50 and 100).
Bollinger bands have tightened. 1H, 4H Elliott pattern implies a continuation of the
bearish pressure.The target is expected at 1.1650 so going short seems to be
preferable today.

The Wild Card
* GOLD
Gold broke the 657.90 resistance level. Gold is in an uptrend supported by 1H
exponential moving averages. The volatility is low. Bollinger bands have tightened.
Today, we should expect to see a bullish configuration. 1H, 4H Elliott pattern
implies that the Gold should gather momentum also today. The target is expected at
659.00 and forex traders may find several opportunities for taking profits today.

www.forexyard.com