Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

U.S. Dollar Rally Due to Weak Equities Falters

Currencies / Forex Trading Mar 31, 2009 - 03:17 AM GMT

By: ForexPros

Currencies Best Financial Markets Analysis ArticleThe USD is holding gains in late New York as traders continue to digest weekend developments; focus is on the upcoming G-20 meeting which is expected to produce solid plans for addressing the developing global economic crisis but smart money is not anticipating anything concrete at this point. More interest is on how the ECB may move interest rates with a strong expectations of at least a 25 BP rate cut heavily factored in. In my view, any hint that the ECB will stand pat or make less than a 25 BP cut will likely fuel a short-covering rally although a case can be made for a “buy the rumor/sell the fact” rally anyway.


EURO is holding the 1.3150 area in light trade after a dip into stops around the 1.3150 resulted in a low print at 1.3113 before recovering quickly. Traders note that stops were in good size suggesting that longs were early on the dip Friday and semi-official names were seen on the bid under the 1.3150 area. Also, some profit-taking bids from momentum and short-term shorts were noted suggesting that the selling pressure was not going to last. EURO is also holding the 100 day MA on the dip making for a technical buy; a close above the 1.3200 handle near-term would but the bears on the defense I think.

GBP fell into low prints overnight at 1.4109 and failed to follow EURO lower today suggesting that the dip was supported by quality bids. The rate has retraced about 61.8% of the monthly range and will likely end the month in a “doji” formation suggesting the GBP is at a point of indecision; aggressive traders can buy any further weakness into the low 1.4100 area or slightly below with key support about the 1.4050/80 area.

USD/JPY continued to bounce off support around the 96.00 handle failing to extend the day’s range from overnight lows at 95.94; the rate regains the 97.00 handle into the close leaving a healthy bid-wick suggesting another whipsaw back to the breakdown area around the 98.30 area. Overhead resistance is expected to be heavy on any test of the 98.50/80 area and aggressive traders can look to short the rate on a rally back to that area.

USD/CHF is holding sharp gains against a backdrop of SNB intervention; high prints in New York extended the days ranges to 1.1552 before falling back under the 1.1500 handle. Sellers are likely on any strength and traders can look to sell into the 1.1580 area if we get it on further volatility.

USD/CAD continued to advance as well finding upside stops over the 1.2580 area for a high print at 1.2650 and is holding gains into late New York trade; traders note that resistance is next at 1.2680 area and likely will attract selling from short-term longs but the rate is above the 50 day MA once again possibly encouraging buyers on a firm close. Fib resistance is around 1.2630 and likely some consolidation will be the result the next 24 hours or so.

In my view, the USD rally was largely due to weak equities as the entire day centered around the possible bankruptcy of GM and/or Chrysler; traders note that without the news it is hard to argue for a flight-to-quality rally in the greenback and the higher pricing may be a head-fake. Look for two-way action overnight with a pullback in the USD ahead of tomorrow’s US data.

GBP/USD Daily

Resistance 3: 1.4440/50, Resistance 2: 1.4380, Resistance 1: 1.4300

Latest New York: 1.4248, Support 1: 1.4100/10, Support 2: 1.4050, Support 3: 1.4020

Comments

Rate falls through stops into support around the 1.4100 handle overnight; traders report more stops waiting under 1.4100 with bids around 1.4050 for the day. Rate recovers back to the 1.4200 handle late as late shorts fail to get a foothold. A close back under the 1.4250 area argues for more losses but support is solid around 1.4100 so aggressive traders can buy dips. Traders report large names on the dips last week but they may have been whipsawed out to start this week. Overhead resistance now drops to 1.4380 to 1.4440 area; overhead target of the 1.5000 area likely to be on hold with a test of the lows first possibly creating a range. Traders feel the 23-year lows will likely remain secure. The shorts have taken control of the market above the 1.4440 area for now and if a range is forming a test under the 1.3900 handle is likely; traders report stops in-range adding for two-way action.

Data due Tuesday: All times EASTERN (-5 GMT)

4:30am GBP Index of Services 3m/3m

9:00am GBP MPC Member Tucker Speaks

EUR/USD Daily

Resistance 3: 1.3380, Resistance 2: 1.3330, Resistance 1: 1.3280

Latest New York: 1.3187, Support 1: 1.3150, Support 2: 1.3100, Support 3: 1.3080

Comments

Rate fails at support and clears large stops under 1.3200; rate likely has stops building in both directions but shorts have taken control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; stops under 1.3150 area said to be building in size but the rate recovers from low prints off the 100 day MA suggesting the move lower is likely supported on dips. Overhead resistance of 1.3350 area now back in play; expect sellers in that area on a rally. Asian sovereigns seen selling rallies last week and a US bank seen leaning on the rate at the open; no doubt momentum traders from Friday’s close. Long-term bulls are likely still in control of the market and this significant pullback is a buying opportunity in my view but the timing needs another day or two to work through. Expect two-way action.

Data due Tuesday: All times EASTERN (-5 GMT)

3:55am EUR German Unemployment Change

4:00am EUR Italian Retail Sales m/m

5:00am EUR CPI Flash Estimate y/y

5:00am EUR Italian Prelim CPI m/m

Analysis by: http://www.Forexpros.com - Written by Jason Alan Jankovsky

Forexpros offers the most definitive Forex portal on the web. It contains industry leading market analysis, up-to-the minute news and advanced trading
tools which provides brokers, traders and everyone involved in the financial market with an all-round guide to Forex.

Copyright © 2009 by ForexPros.com All rights reserved.

Disclaimer: Trading Futures and Options on Futures and Cash Forex transactions involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

ForexPros Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules