Forexzilla.org

The forex market is in panic mode. The problems in the credit market worsened in the last few days and the purchase of Bear Stearns by JP Morgan for $2 per share caused massive sell off in many markets. EUR/USD reached 1.5902 but then retreated to 1.5700/800 area. Dealers are expecting joint intervention by the central banks. The forex market is very volatile and 1-month options volatilities jumped form 10.60 to 12.90. EURO is extremely overbought and today’s price action could form a shooting star reversals pattern. We should wait until the next few days to see if it is confirmed. Tomorrow market participants will wait for the FED’s decision and some bets are for 100 bp cut. Be very cautious and don’t leave EUR longs without stop.