The Dollar Is Trying To Close The Gaps

Daily Forex Fundamentals | Written by TheLFB-Forex.com | Sep 08 08 09:35 GMT |


Overall, the pairs have some big gaps to close. The dollar has already advanced against some pairs, closing the gap, but against others, the dollar has barely moved during the overnight session.

The Euro (Eur/Usd) is just pips away from closing the gap that came at the start of the new trading day. The pair advanced to TheLFB R2 during the early European session, but soon reversed and is now near the neutral pivot point, 80 pips lower from the opening price.

The Pound (Gbp/Usd) is trading just above TheLFB R1, although at one point, the pair advanced 90 pips to TheLFB R3. The pair opened the new week with a huge gap, about 100 pips, and is now trying to close. Last week's gap remained unclosed, however.

The Aussie (Aud/Usd) moved between the first and the second resistance levels during the overnight session, unable to break significantly in either direction. Even so, the pair moved in a 90-pip range, approaching the daily average trading range.

The Cad (Usd/Cad) traded flat during the overnight session, hovering around the neutral pivot point and the 20-day moving average. The cad has a tendency to gain momentum and break the range established overnight at the U.S. session open.

The Swissy (Usd/Chf) traded between the high of the previous session and the neutral pivot point during the overnight session, trading in a range of about 80 pips. The swissy may soon reach the highest point this year, after gaining more than 1500 pips since the bottom made in March. An economic release this morning showed the unemployment rate remained stable in Switzerland in August

The Yen (Usd/Yen) continued to trade in a 60-pip range during the overnight session, after it opened the new trading week with a big gap to the upside. Even though U.S. futures point to a strong open on Wall Street, the yen was not able to break the 20-day moving average, which is providing resistance
Strong momentum for the equity markets

Current Futures: Dow +245.00, S&P +34.70, Nasdaq +35.75

European Trade: European equities are continuing the strong momentum that was established during the Asian session. The major European indexes are trading in positive territory, posting at least 3% gains since the start of trading. The news that the U.S. government will take over the two GSEs sent the market into a buying frenzy. The futures market is currently pointing to a strong opening on Wall Street. The two GSE's, Fannie Mae and Freddie Mac, hold half of the mortgage market in the U.S. With the two companies stabilized, traders speculate the financial market may be able to weather the credit crunch.

In Europe, the major stock market indexes are gaining ground. The German Dax is trading 218.17 points (3.56%) higher to 6,345.61. The U.K. FTSE rose 199.50 points (3.81%) to 5,440.20. The biggest gained in Europe was seen at Omx Stockholm 30 Index, which advanced 41.21 points (5.0%)

The financial shares were the biggest gainers during the Asian session, helping the major indexes post gains. The Nikkei rose 412.23 points (3.38%) to 12,624.46, the biggest gain in the last 5 months. The Australian S&P/Asx advanced 190.40 points (3.90%) to 5,067.50.

Gold rose the most in more than two weeks in London as the dollar fell and crude oil strengthened. Bullion for immediate delivery advanced $10.70 (1.33%) to $ 813.50.

Crude oil rose as another storm is set to hit the oilrigs in the Gulf of Mexico, affecting the oil supply. Crude oil for October delivery gained $1.34 (1.26%) to $107.57

Previous Asian trade: Asian shares opened the new week in very bullish shape, posting triple digits gains even in the first minutes of trading. At the same time, U.S. futures pointed toward a 2% gain at the opening bell. The buying frenzy came as the U.S. Government announced it would take over the two GSEs, Fannie Mae and Freddie Mac, to keep them from collapsing. The market now thinks the financial companies may have the strength to weather the financial crisis. The two companies held over $1.5 billion in assets and roughly the same amount in debt, something that could have triggered a massive crisis if the two companies defaulted. The two companies are seen as key players in the credit crunch since they control over half of the U.S. mortgage market. Since the beginning of the year, the two were down 80%.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com