The Euro rally continued in Europe but ran out of steam late in the day as Oil losses mounted and stocks failed to extend gains. The EURUSD attempted to push higher yesterday, topped at 1.3045 but again, failed to consistently move above 1.3000 so far. The bias is neutral in nearest term. On the upside the move could be extended till 1.3100 levels. (EURUSD - 1.3012). Neutral
The GBP/USD rose for a fourth consecutive day and broke the 1.55 levels, having been supported by stronger-than-expected UK economic growth. Britain's GDP grew 1.1% q/q in Q2 2010, its fastest pace in four years, after a 0.3% q/q increase in Q1. The GBPUSD continued its bullish momentum yesterday, topped at 1.5599 and closed at 1.5594. The bias is bullish in short term but highly overbought in hrly to weekly charts. Stay cautious. (GBPUSD 1.5615).
The Yen was broadly weaker as the market pushed higher on USD/JPY after growing impatient on the downside. Stable markets and an improving technical outlook for the crosses are both encouraging Yen selling. USDJPY is currently trading at 87.80levels. We have seen an up move due to increased risk appetite. Overall the bullishness in yen has still not changed and bias of the pair is bearish. (USDJPY 87.80) Neutral
The AUD is currently trading at 0.8948 levels and touched high at 0.9069 yesterday. AUD/JPY buying was the major catalyst but the market is eagerly awaiting today's CPI figures before pushing higher still. Any type of news signifying downward growth concerns for the emerging economies like China would seriously weigh down the currency. Immediate support at 0.8880 area. (AUDUSD - 0.8948). Neutral to Bullish
Gold is currently trading at 1160 levels and does not seem to be very bullish now. It is holding below its important moving averages of 55 day in daily charts. Most likely target could be 1110 dollars in case we see couple of closing below 1170 dollar . Please note that risk will remain heavily on the downside as 1266.5 resistance holds, and we'd expect another decline sooner or later. Sell on upticks is recommended.
The Dollar index's currently trading at 82.14 levels. The weekly close below 38.2% retracement of 74.19 to 88.70 at 83.15 will solidify this bearish case and bring deeper decline going forward towards 80.04 support, which is close to 80 psychological level as well as 61.8% retracement at 79.73. Incase we don't see 84.56 resistance breaking we have to look for further weakness in the index. (Dollar Index- 82.14) Neutral.