SPOT FX VIEWS AS OF Oct 09, 2007

Euro Spot Outlook as of Oct 09, 2007

VIEW:

Spot Euro closed lower on Monday affected by a general weakness in US Dollar. Supports are now seen at 1.4030 followed by 1.3990. Resistance appears at 1.4100 a break of which could test 1.4160. RSI is neither overbought nor oversold and continues to trade in the neutral conditions. Prices closed below the 8-day ema at 1.4114 while the 21-day ema at 1.4028 seemed providing a firm support.  Averages in the MACD are above the zero line in the indicator suggesting bullishness; only a crossover below the zero line will indicate bearishness.

In absence of many data releases from the region a bounce in the Greenback weighed on the single currency. A better than expected Non-farm payroll release on Friday has helped Dollar gain considerable strength across the board. The only release from the region was German Factory orders which seemed reflecting effects of a stronger currency as the failed to meet expectations (1.2 vs exp 2.1%). Euro can continue to experience pressure from releases of German exports and trade balance due today.

RECOMMENDATION: Initial support is at 1.4005 followed by crucial support at 1.3920 level. Our favored view expects resistance at 1.4075 levels to cap the upside for a fall towards 1.3930 levels for the day.

GBP Spot Outlook as of Oct 09,2007

VIEW:

Spot GBP closed lower on Monday as the Greenback rebounded. Supports are now seen at 2.0320 followed by 2.0280/240. Resistance is at 2.0400 a break of which could test 2.0425. 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 closed above the 8-day ema at 2.0355 and the 21-day ema is at 2.027 indicating intact bullishness. Averages in the MACD are above the zero line suggesting bullishness; only a crossover below the zero line will indicate bearishness.

GBP followed the action in other Dollar majors however performed comparatively better as the Producer prices were quite higher than expectations. Core PPI increased to 2.2% against an expected 2%. In absence of any data release today the wider Dollar stand is expected to drive the move.

RECOMMENDATION: Initial support is at 2.0305 followed by crucial support at 2.0275, below which we will abandon the bullish view. Favored view expects 2.0305/10 to hold for a rise towards 2.0450 levels.

YEN Spot Outlook as of Oct 09, 2007

VIEW:

Spot Dollar Yen closed higher reflecting a bounce in Dollar on Monday. Supports are Seen at 116.90 followed by 116.00.Resistance is at 117.65 a break of which could test 118.00. Prices have closed above both the 8-day ema at 116.35 and the 21-day ema is at 115.85 indicating bullishness. RSI is in neutral condition indicating prices are neither overbought nor oversold. Averages in the MACD are above the zero line in the indicator suggesting bullishness.

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