The EURUSD was volatile but indecisive yesterday. The Euro broke higher after range trading last week the market push to the high of 1.3262. The market has turned cautiously bullish on the EUR for the moment. The ECB has left the interest rates unchanged to 1%. whereas Trichet says in the press conference that these rates are “appropriate” and expects price developments to remain moderate. (EURUSD– 1.3180).
The Sterling consolidated the recent gains but was unable to push above the key 1.6000 psychological level as the market recovers from overbought conditions. We will have US NFP data due for release today. The number is expected to be a better than expected, forecast around -63K which is about 62K better than the previous (-125K). The Gbp charts seem to be highly overbought and ripe for a major correction. Stay cautious. The interest rate was kept unchanged yesterday by the BOE.(GBPUSD 1.5900)
The USDJPY had a moderate bearish momentum yesterday. Market players note that the low from last year Y84.80 could act as a line in the sand where the Japanese Government may get involved to cap the recent strength. Jpy is expected to have the clear reaction to the NFP report due for release today evening. (USDJPY 86.17) Neutral
The AUD is currently trading at 0.9165 levels and touched the high of 0.9183 levels . One of the nature of price movement inside the rising wedge formation is the volume getting smaller, but a break from the formation has become a near possibility and a significant movement can be expected. Immediate support comes at 0.8880 area. (AUDUSD - 0.9165). Neutral to Bullish
Gold is currently trading at 1196 levels. It is holding below its important 55 day moving averages in the daily charts. Most likely target could be 1120 dollars in case we see closing below 1190-1200 dollar for 2-3 days. Please note that risk will push the gold on the downside as 1266.5 resistance holds, and we'd expect another decline sooner than later. Selling on upticks is recommended.(Gold— 1196)
The Dollar index is currently trading at 80.81. The current decline from 88.70 is treated as a correction to medium term rally from 74.19. We'd stay bearish with 83.45 resistance intact and extend the current fall to extend towards 80.04, which is close to 80 psychological level as well as 61.8% retracement at 79.80. Hence, the greenback would continue to be soft for a while in general. Nevertheless, downside should be contained there to conclude the correction and bring rebound. Break of 83.45 will indicate that dollar index has bottomed and should then bring strong rebound towards 85.09/86.42 resistance zone. (Dollar Index– 80.81) Neutral