The dollar continued to fall against the euro and the pound, with GBP/USD printing yet another daily high at 1.65. The market sentiment seems to be back to positive, with commodities and stocks gaining since yesterday and a new wave of hope amongst traders that the worse is over and recovery is progressing slowly but surely.
The EUR/USD is trading heavily since yesterday and the pair seemed to find a good resistance at 1.4060 so far. As long as the pair trades below the latter level, further downside may be in store. The euro is much weaker against the dollar and the pound and EUR/GBP is what is driving the European currency lower in the last few sessions. EUR/GBP is trading on the downside and a clear break of very important support level 0.85 may indicate further losses towards 0.8430.
The economic calendar has a few important releases today, with retail sales out of US the most important event of the day and also jobless claims which traders will monitor closely especially after the latest nonfarm payroll numbers. The retail sales are expected to be higher due to better consumer sentiment and greater expectations that the economy is on the way to recovery. The US government has tried its best lately to promote confidence and hope for a better future and the latest economic indicators show that the market may find a bottom sooner than later.
The crude oil has resumed its upside move and the commodity broke higher above $70 to $72. Next important level is $75 and it seems like a probable target for the time being. The crude oil has appreciated a lot in the last few weeks mainly because elf speculators driving it higher and not fundamental reasons, so therefore it feels like a top may be in place soon and the bears are waiting patiently for the green light until they go south once again.
The trading environment feels very fragile again even with the latest confidence and it feels like any day we can have another big move on the downside what with summer approaching and traders still reluctant to keep positions open for a longer period of time. Investors have always at their back of their minds that last year the whole market crash started after the summer holidays, so this time they do not wish to get caught in another collapse if and when it happens.
Let€™s see how stocks and equities will react later on at New York session and if better than expected retail sales will keep the flows positive for one more day. The week is almost finished and it€™s looking to be another positive one for markets across the globe. The question now is if the dollar will continue its slide on the back of risk appetite and if we see further breakouts in all dollar related pairs in the coming days€¦.