SPOT FX VIEWS AS OF Oct 11, 2007

Euro Spot Outlook as of Oct 11, 2007

VIEW:

Spot Euro closed higher as Dollar continued to lose grounds on Wednesday. Supports are now seen at 1.4090 followed by 1.40300. Resistance now appears at 1.4190 a break of which could test 1.4230. RSI is neither overbought nor oversold and continues to trade in the neutral conditions. Prices closed both above the 8-day ema at 1.4118 and 21-day ema at 1.4045 indicating bullishness.  Averages in the MACD are above the zero line in the indicator suggesting bullishness; only a crossover below the zero line will indicate bearishness.

Euro was less affected by FOMC minutes that looked little hawkish. Failure of a follow through selling took the single currency higher. Today the Euro zone GDP release is expected and if it continues to meet the expectations, Euro is expected to march higher. Market will also be watching comments from ECB President Trichet over the state of the inflation and growth and also the effects of a strong Euro in his speech today.

RECOMMENDATION: Though structure is bullish momentum points to the downside. This hints at a corrective dip first towards 1.4110/4115 before next rise towards 1.4190. It has to fall below 1.4100 to cause doubts about this bullish outlook.

GBP Spot Outlook as of Oct 11,2007

VIEW:

Spot GBP closed higher on Wednesday owing to renewed weakness in Dollar. Supports are now seen at 2.0330 followed by 2.280.Resistance is at 2.0495 a break of which could test 2.0550. RSI is in neutral condition indicating prices are neither overbought no oversold and has ample room before touching the over bought region to suggest a rise. Prices have however closed above the 8-day ema at 2.0371 and the 21-day ema is at 2.0296 indicating bullishness. Averages in the MACD are above the zero line suggesting bullishness; only a crossover below the zero line will indicate bearishness.

In absence of any significant release, GBP followed the action in other Dollar majors. As there are no releases from UK today, traders are expected to eye action in other majors also as the US Trade balance is due for a release today.

RECOMMENDATION: Structure is bullish for levels like 2.0590/2.0660. Breakout point is at 2.0495. Support is at 2.0365. Fall below 2.0333 is needed to doubt this bullish view. Short-term charts show support at 2.0370/0360, which could hold the downside for next rally towards 2.0425. Stop below 2.0347.

YEN Spot Outlook as of Oct 11, 2007

VIEW:

Spot Dollar Yen closed marginally higher on Wednesday. Supports are still seen at 116.80 followed by 116.30.Resistance is at 117.65 a break of which could test 118.00. Prices have closed above both the 8-day ema at 116.65 and the 21-day ema is at 116.06 indicating bullishness. RSI is in neutral condition indicating prices are neither overbought nor oversold. Averages in the MACD are however below the zero line in the indicator suggesting bearishness; only a crossover above the zero line will indicate bullishness.

RECOMMENDATION: This rally is looks more like a corrective one in nature than impulsive. Favored view expects this rally to get over at 117.80 or maximum 118.15. A retracement towards minimum 116.40 is Favoured form the peak. Rise past118.25 would change this view into a bullish one, calling for higher levels like 119.25 and 120.10. Short-term support near 116.90 could hold for the initial rally. Fall below 116.80 could signal weakness.

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