1. News: It has been quiet yesterday. Today watch out for US Housing starts - but this figure will continue to fall and will not be much out of expectation. The biggest news to watch for is FOMC at Singapore time Wed 0300hrs. Will Fed cut interest rate?
2. Stock Market: Wall Street resumed its slide Monday as investors absorbed a gloomy outlook for the banking sector as well as bleak news about housing. The major stock market indexes each fell more than 1.5 percent, with the Dow Jones industrial average giving up more than 200 points.
Stock markets overseas also slumped. In European trading, Britain's FTSE 100 closed down 2.71 percent, Germany's DAX index fell 1.32 percent, and France's CAC-40 slid 1.65 percent.
3. Major Currencies: It has been much a side way movement for the dollars against the major currencies.
4. Technicals: Yesterday saw WMA5 (daily chart) attempting to pass EMA100, but failed. The CCI move down with yesterday price, but not into an oversold position. Likewise on the 1 hour chart, EMA5 failed to punch up through EMA55 and EMA100. The question is a matter of time and attempts. 2.0400 still pose a good support line for price to sail to EMA200 on the daily chart. On the contrary, 2.0570 is a good price for resistance.
5. Personal Assessment: The last two time Fed announced interest rate cut, it push the GBP up. (Sep 18 and Nov 1). There has been hints of no cut this time round. 'Further sharp increases in crude oil prices have put renewed upward pressure on inflation and may impose further restraint on economic activity,' 'since the October rate cut, the data suggests the US economy is still 'resilient,' but noted that volatility and strains remain.' Bernanke warns.
A good look out is for WMA to pass support 2.0400 or EMA100 or pass resistance 2.0570 or EMA55. It can go both way with good chance for both. With a quiet day all brewing towards FOMC - play with caution.
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