Forex Market Technical and Fundamental Recap
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Today's Forex Analysis summary.
EUR USD
A strong fundamental report drove the EUR USD higher on Thursday. Following four days of lower-lows, the Euro came back with a vengeance as the European Commission’s gauge of economic sentiment posted stronger-than-expected results.
Shorts covered following the news as it somewhat diminished Wednesday’s comments from a European Central Bank member calling for the possibility of an interest rate cut to below 1%. Shorts were pricing in a rate cut on expectations of a worsening Euro Zone economy. Although today’s report still showed that consumer confidence was down, the improvement in the retail confidence index indicated that consumers were still willing to spend.
GBP USD
Upside momentum is slowing down in the GBP USD as buying has diminished near a key 50% retracement price at 1.6085. This price is critical to the structure of the current rally as it will dictate how much further this market could rally. If this market can establish support above 1.6085, then it has a great chance of continuing the rally to 1.6694.
Because of the size of the recent rally without any economic substance, traders have been reluctant to add to established positions at current levels. In addition, some traders do not seem too interested in initiating new positions at current levels until the market makes a correction.
USD JPY
News that Japanese investors bought more foreign assets last month drove the USD JPY sharply higher on Thursday. Declining global tensions and signs that the global recession may be bottoming fueled Japanese investor demand for higher yielding assets. This move should be welcomed news for the Bank of Japan which has been looking for lower Yen prices in order to stimulate the export market.
USD CHF
The USD CHF weakened on Thursday as traders bought the Swiss Franc following news that Switzerland’s trade surplus increased sharply in April. Although the increase in surplus was due to a steep decline in imports, traders must feel that the Swiss National Bank has taken enough steps to turn around the export market in the future
USD CAD
Higher crude oil and firmer equity markets helped buoy the Canadian Dollar on Thursday. The weakness in the USD CAD puts this pair in a position to test a major 50% price. Based on the main range of .90552 to 1.30623, traders should look for the market to test 1.1059. There may be a technical bounce at this level or if momentum is strong enough, a continuation of the current break to the next retracement price at 1.0586. Needless to say, the USD CAD is at a critical juncture.
AUD USD
Increased trader appetite for more risky assets helped get the AUD USD back on tract to test a major 50% retracement price at .7928. Depending on how the momentum is following a test of this level, a test of this level may either trigger a technical bounce down or launch an acceleration to the next resistance level at .8382.
NZD USD
Surprise news that the S&P Corporation raised the outlook on New Zealand’s debt rating from negative to stable helped boost the price of the NZD USD. This news may have given this pair the shot in the arm that it needs to launch a rally to a major 50% price at .6553
By ForexHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis
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