Upbeat Sentiment!
After the news were flowing our way from the US as Europe takes side for a change some positive indicators flew our way as Asian and European markets are back to absorb the happening of the financial scene. Yesterday’s late US session news are now still taking part in the markets yet not for a strong dollar yet for a stronger sentiment towards the battered financial sectors.
The US dollar weakened again against majors after the effect of new wore off and now senses are locked towards weak consumer sentiment to be released since European fundamentals are absent today as well.
Subsided fears helped the Euro regain ground opening today with upside momentum to take the trading range against greenback higher; after early attempts the euro managed to successfully breach the strong resistance level at 1.5557 which as we said represents the 23.6% of the Fibonacci Retracement for the latest upside wave; currently its trading near its set intraday high at 1.5588 and targets the 1.5680s which is the upcoming resistance level ahead of its record high levels. The upside wave remains valid as long as on an intraday basis the euro manages to close well above the mentioned breached support.
The royal pound was able to gain against the dollar as well, as currently with uncertainties revolving the timing of the upcoming move by the MPC to lower rates, the pound remains the highest yielding currency among G7 and the spread of yields has certainly widened against the dollar; that remains the dominant sentiment for the pound despite the CBI’s released report today, which is one of the biggest lobbying groups in UK, as they downgraded growth projections for the year on the back of financial turbulence from the previous 2.0% to now at 1.7% which comes of no surprise and was discarded in the market since the BoE and the Treasury have already revised growth to those levels for 2008.
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After breaching the strong resistance level in the early Asian session at 1.9879, the pound managed to hold its high range of trade facing the dollar yet is consolidating in the European session among 1.9900s-1.9940s where the latter resembles minor resistance as it resides at the 100 day MA, the consolidation might provide the pair with stronger upside momentum to target the psychological barriers at $2 that also resembles the 38.2% correctional Fibonacci level, which if breached will confirm the upside wave as long as the pair closes above on an intraday basis.
Rising stocks and reconciled faith in the financial markets, especially after the higher bid for the Bear Stearns takeover and walking the path today by Asian and European markets has once again put the yen as a lucrative funding currency which is forcing it to weaken against majors.
The yen is battling ground with a weak dollar from one side and carry trades from the other; the USDJPY managed to close above the 100.50s yesterday yet the upside momentum the dollar acquired did not manage to take the pair to breach the 101 declining from the early set intraday high, while the lack of downside as well did not help the yen to take the pair and breach the 100 levels rising from there to trade near the strong levels at 100.50s once more. The pair needs stronger momentum to design a clear heading for the new wave either will fail to continue the upside and head to the 98.60s support level, or the upside bias takes over which needs to see strong consolidation above the 100.50s at least to validate targets at 102 levels which is the 50% Fibonacci level and if breached will confirm the upside potential.
Yet over all the pair remains subject to very high short-term volatility while extended losses against the euro in specific is putting more downside pressures on the yen; as the EURJPY is still targeting the 157s setting the high today at 156.70. As for the yen against the pound it is also weakening yet faces resistance at 200s ahead of targets at 201.80s which also dwells at 20 day MA.
Crown Forex
disclaimer:The above may contain information for investors/traders and is not a recommendation to buy or sell currencies, gold, silver & energies, nor an offer to buy or sell currencies, gold, silver & energies. The information provided is obtained from sources deemed reliable but is not guaranteed as to accuracy or completeness. I am not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trading currencies, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, gold, silver &energies presented should be considered speculative with a high degree of volatility and risk.
