Forex Market Technical and Fundamental Recap
Most of the countries around the world are involved in the Forex Trading market, where money is bought and sold, freely between buyers and sellers. Forex today, provides a great substitute to the stock market trading for the traders and investors. After the swine flu Market behaved unexpectedly but the USD shown some good moves, hope the Things will going to back in rhythm soon...
Updates
On Friday the CAD (USD/CAD) loses approximately 200 pips since positive Canadian employment data coupled with better than expected U.S. employment data and increasing equity markets led to the Canadian Dollar escalation against the greenback. The couple closed the week testing the 1.1500 level as sustain and trading below all of the major daily easy moving averages. The Canadian unemployment rate stayed at 8.0% in April and the economy added 36,000 jobs in April.
The Yen (USD/JPY) dropped 70 pips despite equity markets moving much higher. The USD weakened across the board and it was reflected in the swissy. The pair lost almost 250 pips, on Friday, testing the 1.1050 level at the close. For the week, the pair dropped almost 300 pips. The Swiss unemployment rate rises to 3.4% in April from 3.3% in March.
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Today's Forex Analysis summary.
The Euro rallied on Thursday after the European Central Bank cut its benchmark interest rate to 1.0%. This news was already in the market and traders saw it as a buying opportunity. The ECB also announced a plan to buy government assets. This should have been bearish news but it did limit gains.
GBP USD traders sold the British Pound after the Bank of England left interest rates alone and injected another $75 billion into the financial system through its quantitative easing plan. This move flooded the market with money and has the potential to debase the currency if done improperly.
The USD CAD posted a new low for the year but closed higher. This is an indication that the buying may be greater than the selling in this price area. The weakness in U.S. equity markets gave traders an excuse to take profits following a twelve day decline.
Thoughts of a revival of the carry trade triggered a rally in the USD JPY early Thursday morning as traders sold the Japanese Yen to invest in the higher yielding stock market. Gains were limited as equity markets fell sharply lower. With the equity markets starting to look weak, watch for strength to develop in the Yen.
Technical traders are defending the USD CHF in front of a pair of bottoms at 1.1240 and 1.1158. If this area fails then the Swiss Franc is likely to appreciate. Now that the world knows the details about the U.S. banking system, traders may begin to focus on the condition of the Swiss banking system. Increased appetite for more risk may encourage Swiss investors to pull their money out of low-yielding U.S. investments.
The Australian Dollar is still trending higher in response to the Reserve Bank of Australia leaving its benchmark interest rate unchanged earlier in the week and the news that an economic recovery in China may lead to an increase in Australian exports.
The NZD USD rallied into the April high where it found resistance. This current rally has been all speculation as increased trader appetite for higher yielding assets has been encouraging buying. Gains could be limited because the New Zealand economy does not support a rally at this time.
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