By Jerry Furst- Sr Analyst “1st on Forex” www.Investors-Education-Network.com

No Surprise Expected - “Jawboning” Ahead

With rates effectively at 0-0.25% Bernanke and the Fed can really only “Jawbone” at this time. Rumors and fears of Quantitative easing seem to be the “built-in” expectations.

Charts Not Showing thier Hand

A scan of the charts shows nothing “exciting” as price is likely settling in for the FOMC announcement at 2:15 EST.

GBP-USD 4 Hour chart(click to enlarge)

The Pound-Dollar had been sporting a Head and Shoulder pattern in progress, however, the chart above shows price coming back up to resistance at the neckline.

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By Jerry Furst- Sr Analyst “1st on Forex” www.Investors-Education-Network.com

Reality on the Brink!

The global financial markets seem to be drifting in and out of a surreal stream of headlines underlined by facts that boggle any rational mind that attempts to seriously grapple with the facts of what is happenning.

It’s All a Matter of Perpsective

To illustrate where we are today in comparison to 1995 - It is almost exactly 14 years since the notorious “Rogue Trader”  - Nick Leeson sank Baring’s - the Queen’s Bank, with an untimely short straddle.  A pillar of the British Empire’s financial system for over 200 years crumbled under the “stupendous” loss of: $1.4 Billion USD (827 Million -GBP)  Staggering numbers 1,400,000,000.

Today we talk about Hundreds of Billions…. and we don’t even know where the money is going! Except maybe for some Roman shades and Victorian furniture in John Thain’s office. I just don’t get it.

Pound Gets No Reprise

GBP-USD 4 Hour Chart (click to enlarge) shows Head and shoulder pattern paused with a downward trend channel intact.

Euro Continues Slide vs Dollar

EUR-USD 4 Hour chart (click to enlarge) shows Trend Channel intact since December 2008. The Financial Times reports bank deposits at the ECB were 72.7bn Euros lower at 111.4bn

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients 
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Light Scheduled Economic News

Scheduled economic data is light for the US this week as Monday is Martin Luther King Day followed by the historic and long awaited inauguration of Barack Obama. Weekly Jobless Claims, Store Sales, and Housing data will likely be eclipsed as the world waits on the smooth transition of power from Bush to Obama – and signs of what the new commander in chief will say and do.   

Media Hails to the New Chief

The media has put a significant percentage of the US population literally in a state of mass psychosis (Obama Mania). This places the new President on an extremely high pedestal. I personally have warmed to Barack - a smart, charismatic speaker, and hope he succeeds in pulling the US and the world back to “normal” - but the harsh realities of the world will take 2009s challenges deep into 2010. Obama has his hands full - and possibly tied.

The Euro Breaking Resistance (click to Enlarge)

USD-CAD  2 Hour Chart Sunday Jan 19, 2009

Upward Trend Channel - Breaking Support (click to Enlarge)

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Currencies are Breaking Out

As 2009 officially gets underway with the 1st full week of trading - the currencies are displaying “unusual” correlations - or the lack there of. For example:

UK Pound Rallies vs The Dollar

While the Euro Breaks Down Against the US Dollar

While the US Dollar Appreciated against the Swiss

The USD-CAD Dropped to a new Support Level

So the above shows that the US Dollar is  by no means moving in the same direction. The current variations of correlations are not acting in traditional ways - this suggests to me that more volatility is likely on the way.  

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Jerry Furst  is an active trader, educator, and Founder of Investors Education Network (IEN), He is a Mentor and Trading Coach to Select Clients  Click Here for a Free Self Evaluation Survey.