Forex Market Technical and Fundamental Recap
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Today's Forex Analysis summary.
The U.S. Dollar had a volatile two-sided trade today as traders reacted to a friendly employment report, an unofficial report that the bank stress tests would show better than expected results and a smooth Treasury Note auction.
The EUR USD traded in a tight two-sided range today. Much of the selling pressure was related to concerns over the Euro Zone economy and the upcoming actions by the European Central Bank tomorrow.
The GBP USD was under pressure early Wednesday as traders evened up positions ahead of tomorrow’s Bank of England interest rate decision. The BoE is expected to keep its benchmark interest rate at 0.50% but may offer significant information regarding its quantitative easing plan.
Strong gains in the U.S. equity markets triggered by a better than estimated ADP employment report helped to support the Canadian Dollar Wednesday morning. Additional support was provided by a sharply higher crude oil market as well as firmer gold and copper.
Throughout the New York trading session the USD JPY traded on both sides of the market as stocks fluctuated between positive and negative. Trading is expected to be volatile the next two days as traders await tomorrow’s bank stress test results and Friday’s U.S. Non-Farm Payrolls Report.
The USD CHF saw uncharacteristic volatile trading on Wednesday. Trading should continue to be volatile as traders express uncertainty over the release of tomorrow’s bank stress test results and Friday’s U.S. Unemployment Report
Strong rallies in commodities and stocks helped fuel demand for higher yielding assets like the AUD USD. Traders are confident in buying the Aussie because of the improving Chinese economy and the fact that the Reserve Bank of Australia refrained from cutting its benchmark interest rate at its last meeting earlier in the week
Although the fundamentals do not support it, the NZD USD pushed higher throughout the New York trading session. Like the Aussie this pair was primarily by increased trader appetite for risk.
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