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Monday, 15 Feb 2010

Greece Worries Continue to Impact Euro

With a slow news day forecasted for today, the Euro continues to be weighed down by Greece's deficit worries. Further impacting the hard hit currency is the lack of a concrete plan from the European Central Bank to come to Greece's aid. This does not bode well for the Euro in trading today.

EUR/USDGBP/USDUSD/JPYUSD/CHFAUD/USDEUR/GBP
Daily Trenddowndownupupupdown
Weekly Trenddownnodownupupdown
Resistance1.36951.575091.101.08850.89800.8785
1.36601.571590.801.08500.89500.8755
1.36301.568590.451.08200.89150.8720
Support1.35651.562089.801.07550.88450.8655
1.35301.559089.501.07250.88150.8625
1.35001.556089.151.06950.87800.8590

Economic News

USD - Investors Continue to Flock to Safe Haven USD

Following the U.S. Dollar's bullish session in trading last week, it appears that the greenback is set for another strong week against its major counterparts. A bank holiday in the U.S. today likely means that any Dollar movements will be determined by non-U.S. news.
Persistent Euro-zone deficit worries could give the Dollar a significant boost against EUR. In addition, further tightening of Chinese monetary policy is predicted to slow down the global economic recovery. These will likely drive investors to the save haven Dollar.
This week is full of different American economic indicators likely to impact the USD. The release of meeting minutes from the most recent Federal Reserve meeting, as well as a housing starts report are two events predicted to give the greenback a boost. As for today, the Dollar has yet to make any major moves against its counterparts. Traders may be wise to take a wait and see approach to see where the market is heading.

EUR - Lack of ECB Plan to Combat Deficits Hurts Euro

Following last weeks meeting of the European Central Bank, investors were decidedly unenthusiastic regarding the lack of a plan to assist Greece in combating its mounting debts. Consequently, the Euro dropped near a 9-month low against the U.S. Dollar. This pessimistic sentiment is predicted to continue this week, as it is becoming clear that there is no clear strategy to aid Greece.
With no major Euro indicators scheduled for today, investors seem to be going short on the single currency as it does not appear that any good news is on the horizon. Currently EUR/USD is trading around the 1.3605 level, very close to the near record lows reached last week. Fresh concerns over Spain and Portugal's debts will likely do nothing to aid the ailing currency in the foreseeable future.

JPY - Yen Hurt by Fresh Chinese Regulations

Despite a GDP report showing that the Japanese economy grew at a strong rate in the last quarter of 2009, other market concerns weighed down on the Yen in trading today. Analysts do not predict that Japan will be able to maintain its current rate of growth. Furthermore, it appears that as China continues to execute its new monetary policy, the Yen suffers as a result. Fears that the Chinese actions could slow down the global economic recovery have not bode well for JPY. Currently USD/JPY is trading at around the 90.18 level, up almost 20 pips from when the market opened earlier. Traders may want to go long on the pair today as it appears that the greenback will maintain its gains in the near future.

Crude Oil - Crude Drops As a Result of Strong Dollar, Chinese Policy

After dropping rather significantly in trading late last week, crude is slightly up today as markets are still absorbing the new Chinese monetary policy. These modest gains are not forecasted to last. With China set to further tighten its banking policies, investor sentiment toward commodities in general is down. Furthermore, a higher then expected result from an American oil inventories report last week did not help the price of crude in trading. Forex traders may want to think twice before entering into any crude oil positions, at least until a clearer picture of the market place emerges.

Technical News

EUR/USD

While most indicators are currently floating in neutral territory with the pair currently range trading between 1.3580 and 1.3620, the 4 hour and daily RSI are floating near the oversold territory indicating that an upward correction may take place later today. Going long with tight stops may be advised.

GBP/USD

The daily RSI is floating in the oversold territory while a bullish cross is evident on the 2 hour MACD indicating an imminent upward movement might take place later today. Going long for today may be a good choice for today.

USD/JPY

The pair is currently range trading between 90.00 and 90.30 with most indicators floating in neutral territory. Waiting on a clearer direction for the pair may be advised for today.

USD/CHF

An impending bearish cross is evident on the hourly chart's Slow Stochastic while the 4 hour RSI is floating in the overbought territory. Going short for today may be advised.

The Wild Card

GBP/AUD

A fresh bullish cross is evident on the 8 hour chart's Slow Stochastic, while the daily and 8 hour RSI are floating in the oversold territory. Forex traders may be advised to go long for today.

Current Time: 10/02 03:41 GMT
# Time $€£¥ Event Per. Prev. Fore. Act. Imp.
10/02
04:45JPY+ 10-y Bond Auction0.52|3.6*-1
06:15AUD+ RBA Annual Report***1
08:00EUR+ Spanish Unemployment Change8.1K31.3K-3
09:30GBP+ Construction PMI64.063.7-5
10:00EUR+ PPI m/m-0.1%-0.2%-1
12:30USD+ Challenger Job Cuts y/y-20.7%--1
12:45EUR+ Minimum Bid Rate0.05%0.05%-5
13:30EUR+ ECB Press Conference***5
13:30USD+ Unemployment Claims 293K299K-5
15:00USD+ Factory Ordersm/m10.5%-9.2%-3
15:30USD+ Natural Gas Storage 97B--1
00:30AUD+ AIG Services Index49.4--1
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