This week, Forex market cynicism noted the low U.S. consumer confidence, and ignored surprisingly hawkish rhetoric and equally surprising strong U.S. job market and export growth numbers, and the dollar continued down against almost all of the world’s major currencies. Even more major financial institutions report massive losses following the global credit crunch and continuing U.S. housing market correction, and commodities including gold and oil reached historic highs.

Despite Wednesday’s statement by the U.S. FOMC of no further interest rate cuts without data to drive it, market expectation remains for an additional cut in December or early 2008. Talk of global support for the currency was begun by no less than the head of currency research at Morgan Stanley in London.

With gold prices nudging $800 per ounce, the Australian dollar continues strengthening against its U.S. counterpart and talk of parity in 2008 has been heard. The AUD/USD reached highs above 0.93 following the announcement of the U.S. rate cut on Wednesday 31 October, with a support point for retracement around 0.9137 followed by 0.9101, and resistance not currently on the radar screen.

Despite higher than expected consumer inflation rates in Euroland, the USD/EUR reached yet another record high at 1.4528, which sets the stage for 1.5000 in early 2008. The overall trend remains distinctly upward, as it has on the monthly chart since 2001. The hourly chart shows a climbing price channel, with initial support at 1.4400 followed by 1.4388; there is a resistance point at 1.4505, which is the top of the envelope.

The Canadian dollar continues to appreciate with oil prices hovering just below U.S. $100 per barrel. This is the highest historical point since the currency floated with no real end in sight as the USD/CAD lost 2.15% this week alone. Momentum remains strong with the RSI on the weekly chart hovering around 12.6 with 32 considered a buy indicator. The next major target point is 0.9000, which should be reached in 2008. For the shorter term, there appears to be some support for the currency around 0.9335.

Bank of Japan again left interest rates unchanged although domestic economic indicators were surprisingly low, mainly dragged down by tighter building regulations which have brought construction nearly to a standstill, making this a temporary situation. After the sharp drop two weeks previously, although the current trend remains downward, the USD/JPY went into a range with support at 114.00 followed by 113.35, and resistance at 117.94.

The U.K. pound sterling climbed for seven straight days on the widening interest rate gap against the USD, closing at levels not seen since 1981, and the momentum continues with the pound. The overall trend has remained bearish since April 2006 on long-range charts, with position traders purchasing on the dips. The break above 2.0550 on Thursday 25 October raised the USD/GBP above its resistance point; if it returns to range-trading, this could become its new support. There are some indications of resistance at 2.0785 but the possibility of reaching 2.1000 at end 2007 or early 2008 cannot be denied.

As stocks continue to slide globally, the Swiss franc as a safe harbor currency appreciated against both the EUR and the USD.