Coming up Today

  • GBP - CBI Realized Sales
  • USD - Durable Goods Orders
  • USD - Unemployment Claims

Risk seekers are getting slaughtered in early morning trading as the GBPUSD has hit a new 2010 low, while the EURUSD at 1.3455 barely above its own 2010 lows. Also commodities have sunk as Gold is down $10 and Crude Oil is back below 80. The big news of the morning was comments late yesterday that S&P may lower Greece's credit rating by a few levels. Initially this had little impact on the markets, as it wasn't really a new surprise. Additionally, Australian Private Capital Expenditures came out much better than expected, and led to a move higher in the EURUSD as it followed the AUDUSD which spiked up to 0.8952 on the news.

Nonetheless, the gains were short lasted, as losses in the Japanese stock market led to a slow decline in riskier assets, which intensified as the morning went on. The first brick to fall was the GBPUSD. It was holding above the 1.5400 level, but once that figure was breached, sellers began to aggressively enter the market. That led to the EURUSD falling, and then everything else.

Of important note, the biggest beneficiary from today's move isn't the dollar but the yen, which continues to take advantage of safe haven buying this week. As such, the USDJPY which began the week at 92.00 has now fallen to 89.60. The question is who is doing the selling in the USDJPY, is safe haven seeking traders, or has it been driven by Japanese exporters who are hedging their future sales, and don't foresee much of a move higher in the USDJPY. If it is the latter, than this means the 92.00 level may offer strong resistance going forward.

Looking ahead, traders will be watching US unemployment claims. The figures recently have shown that job losses continue to occur, even as the US's general economy has appeared to stabilize. Part of the reason for the high unemployment claims is due to the fact that corporations continue to lay off workers to cut their costs down.

EURUSD Support/Resistance 1.3440/1.3655
GBPUSD Support/Resistance 1.5330/1.5425
USDJPY Support/Resistance 89.45/90.00