The market has been fairly quiet since the US open with all of the major currencies trading by session opening levels. Equities have been getting a boost into the London fixing with the price action more attributed to a correction following yesterday's sharp sell-off than any real fundamental catalyst.
CROSS COUNTRY - MIDDAY SNAPSHOT AND ANALYSIS OF SELECTED CROSS RATES
MIDDAY SNAPSHOT - The market has been fairly quiet since the US open with all of the major currencies trading by session opening levels. Equities have been getting a boost into the London fixing with the price action more attributed to a correction following yesterday's sharp sell-off than any real fundamental catalyst. The US trade deficit narrowed $39.9B in December, the lowest reading since February 2003, while Canada produced its first deficit since March of 1976 . Canada housing data came in slightly better than expected. Fed Governor Duke was on the wires stressing the need for additional aid in the housing sector, while also warning that a delay in stemming foreclosures could prove costly. Treasury Secretary Geithner echoed much of what was said yesterday to the Senate Budget Committee . Also generating attention and interest is the current testimony by the bank CEOs on the use of TARP . In the commodity markets, gold is tracking some 3.0% higher on the day while oil trades marginally lower.
Aud/Nzd has been trading with a heavier tone since failing by 1.2845 in late January. A bout of sideways consolidation has now been broken to the downside, with Tuesday's bearish price acting being confirmed today as the cross once again trades back below a double top neckline by 1.2465 (2Feb low). This now opens deeper setbacks over the coming days back towards 1.2285 (8Dec high), from where fresh buying can be expected by the former resistance now turned support.
Chf/Jpy price action has been less than compelling with the market attempting to carve out a medium-term base by the 75.00 area (12Dec/23Jan lows) but unable to establish any real upside momentum at this juncture. There is the possibility for a major double bottom but a more significant push back towards 87.05 (29Dec high) would be required to get us excited about this idea. In the interim key levels to watch above and below come in by 79.75 and 77.45. We would recommend looking to establish fresh longs on a break above 79.75.
Eur/Cad looks to have found a base in the 1.5700 area after failing to close below the latter on multiple attempts over the past several days. This has now opened a fresh push higher to clear key short-term resistance at 1.6115 (03/04Feb highs). Daily studies show more room to run and look for additional upside over the coming days back towards 1.6295 (28Jan high) with a retest of the 50-Day SMA by 1.6420 on a break above. Today's low by 1.6000 (100-Day SMA) should now support on dips.