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Tuesday, 9 Mar 2010

Greece Debt Concerns Ease, EUR Currently Bullish

Some of the latest price movements in the EUR have reflected a growing sense of optimism in the Euro-Zone, given the mild easing of debt concerns in Greece. Switzerland also appears to be having a positive effect on the region with a recent report which showed retail sales climbing much higher than forecast last month. Investor confidence in the region also appears to have risen slightly better than was anticipated. Whether Europe can sustain this bullish momentum is yet to be seen, but so far the regional currencies appear to be holding their gains.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddowndowndownupdowndown
Weekly Trenddownnodownupdownup
Resistance1.37151.512090.951.08450.91900.9165
1.36801.508590.601.08100.91550.9130
1.36501.504590.301.07800.91250.9100
Support1.35801.498089.651.07100.90600.9035
1.35501.495089.301.06800.90300.9000
1.35151.491589.001.06500.90000.8960

Economic News

USD - Dollar Trading Lower as Investors Regain Confidence in Euro

Following last Friday's less-than-inspiring Non-Farm Payrolls data, the US Dollar has entered what appears to be a diverse array of price movements. Against the EUR and CHF, the greenback has entered a range-trading pattern with distinct highs and lows. The EUR/USD is currently trading at 1.3615, down from yesterday's 1.3680. Against the Yen, the Dollar has started coming back down from last week's jump. After reaching upwards of 90.60, the pair now trades just above the 90.00 price level.

The USD has taken a downturn lately, following Friday's modest rise. The easing of debt concerns in Greece has a number of forex market participants buying back into the Euro. Whether Europe can sustain this bullish momentum is yet to be seen, but so far the regional currencies appear to be holding their gains.

Since today's economic calendar will be void of any news from the United States, the chances of any major market corrections today are slim. However, if we were to correlate the potential movement of Crude Oil with the price of the EUR/USD, there is a chance that we could see some Dollar strengthening as the technical indicators are showing a potential downward move in Crude Oil later today.

EUR - EUR Improving, but Momentum may be Lost with Light News Week

The EUR appears to have leveled off against the majority of its currency rivals. Moderate downturns were experienced against the CAD and AUD, however, with price dips of 60 and 40 pips, respectively. Versus its primary counterpart, the US Dollar, the EUR was trading bearish overall on the day near the price level of 1.3615, down from 1.3700 seen earlier in the trading day. The EUR/USD pair, moreover, appears to be range trading between 1.3450 and 1.3730.

Some of the latest price movements in the EUR have reflected a growing sense of optimism in the Euro-Zone, given the mild easing of debt concerns in Greece. Switzerland also appears to be having a positive effect on the region with a recent report which showed retail sales climbing much higher than forecast last month. Investor confidence in the region also appears to have risen slightly better than was anticipated.

Overall, if the 16-nation Euro-Zone economy continues to provide data which supports the notion of improving economic sentiment, there is a strong chance the EUR will see increasingly strong signals of reversing last month's losses. However, since we are expecting a light news day, the chances of this happening today are slim. Additionally, this entire week appears to be light on European market news and as such could mean that the EUR will not be in the driver's seat of its price movements until next week.

JPY - JPY Paring Friday's Losses

After experiencing a sharp decline against all of its major counterparts on Friday, the JPY now appears to be regaining strength in today's early trading hours. So far the Yen has climbed 185 pips against the British Pound and is currently trading at the 135.15 price mark. Against the USD the JPY currently sits just above the 90.00 price level but appears to be facing a significant support line at that price.

With a number of machinery and industrial figures being published by the Bank of Japan (BOJ) today, there is a chance that the JPY will witness a higher-than-usual level of volatility in trading later in the afternoon. Significant price barriers are being touched on almost every JPY pair. If a breach occurs, the JPY could jump to completely pare the losses made last Friday. But if the JPY cannot gain the necessary momentum, there could be a downturn on the way.

Crude Oil - Crude Oil Testing Significant Price Barrier

Oil prices have continued to rise following last week's sudden surge beyond the $80 price mark. A number of analysts have estimated that this rise may continue given the upcoming onset of the driving season in the United States and subsequent jump in gasoline consumption. However, some have begun anticipating a downward turn given the conclusion of the colder winter months and impending drop in heating oil consumption.

With this contradictory information, what we can deduce is that the $81.50 price mark represents a significant psychological barrier. Should Crude Oil prices break beyond this resistance line, there's a chance that the rising price could continue. If it fails to break through, on the other hand, commodity traders should see oil prices declining back towards the $80 price mark before the middle of the week.

Technical News

EUR/USD

While most indicators for the pair are floating in neutral territory, a modest upward correction may take place today as the 2 hour chart RSI is floating near the oversold territory and a bullish cross is evident on the 4 hour chart's Slow Stochastic. Going long with tight stops may be advised for today.

GBP/USD

The pair may be seeing a bullish correction today as the hourly, 2 hour and daily RSI are floating in the oversold territory indicating an upcoming upward movement. Furthermore a bullish cross is evident on the 4 hour and 2 hour charts' Slow Stochastic. Going long for the day may be a good option.

USD/JPY

The pair seems to be exhibiting mixed signals at the moment with the 4 hour and 8 hour charts' RSI floating in the overbought territory, while the hourly and 2 hour RSI floating in the oversold territory. Furthermore, a bullish cross is evident on the 2 hour chart's Slow Stochastic, while a bearish cross is evident on the daily chart's Slow Stochastic. Waiting on a clearer direction for the pair may be advised for today.

USD/CHF

The pair seems to be range trading at the moment, with most indicators floating in neutral territory. A slight bearish correction might take place, however, as a bearish cross is evident on the 4 hour chart's Slow stochastic and the 2 hour RSI is floating near the overbought territory, indicating and impending downward movement. Going short with tight stops may be advised for today.

The Wild Card

GBP/AUD

The pair's recent downward trend may be seeing some correction today as the hourly, 2 hour, 4 hour and daily RSI are floating in the oversold territory and a bullish cross is evident on the hourly and 2 hour charts' Slow Stochastic. A breach of the lower Bollinger Band is also evident on the 4 hour chart. Forex traders are advised to go long for today.

Current Time: 11/24 00:12 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
11/24
JPY+ Bank Holiday---1
08:15CHF+ Employment Level4.20M4.22M-3
09:00EUR+ German Ifo Business Climate103.2103.0-5
14:00EUR+ Belgian NBB Business Climate-6.8-5.3-1
14:45USD+ Flash Services PMI57.157.31
23:50JPY+ Monetary Policy Meeting Minutes3.5%3.6%-3
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