Thursday’s Forex Levels



FX Levels and Comments for Thursday

General Note:

Bear in mind today’s levels and targets (where applicable) may carry little weight after
the FOMC decision as pure momentum will dominate trading NZD/USD:

A very big development from a technical standpoint. Key support at .6950 has given way and
suggests a longer-term move towards .6430 given that the break of .6950 represents a head &
shoulders neckline started on Jan 18, 2005.
In the short-term, a move towards .6430 is quite unlikely as most intra-day charts are now oversold.
Traders may simply wish to wait for a period of consolidation, a rally into resistance or simply the
FOMC decision, before committing capital.

Dollar Index:

We are not convinced that the dollar will break to yearly highs just yet, the re-test of
yesterday’s highs at the 89.48 level is not the most technically sound pattern we have seen
and the FOMC decision carries tremendous weight going forward, For now this is merely an
observation and not a “market call”. However, an FOMC decision with a wrinkle
will make the dollar quite vulnerable in our opinion.

GBP/USD:

There is little to dispute here, the trend is now clearly down. Overnight a price projection
off the daily chart, 1.7935 was hit. Whether or not this will represent a floor in the price
action is debatable, but a minor move higher is likely with 1.7980 serving as solid resistance for short entries

Despite its ability to hold onto .7600 and a bullish stochastic divergence, gravity seems to be
having more of an effect that any counter-trend rally formations. A positive development from
the FOMC will certainly seal AUD’s demise short-term towards .7565.

Note the head & shoulders neckline at .7490 off the daily chart

USD/NOK:

Rate hike of 25 bps has proven to be somewhat bullish for NOK, but gains have been limited,
likely due to FOMC. A break of 6.5375 will likely expose lower levels towards 6.5150 & 6.5060

As always, feel free to send me your comments and
questions.

Dave