Coming Up Today(all times GMT)

  • GBP MPC Meeting (11:00)
  • CAD Housing Starts (12:15)

Over the weekend, the EU and IMF teamed up together to create a €750 Billion Emergency EU Stabilization Fund. Also, the ECB and FED pumped liquidity into the markets to help support the price of falling bond prices. On the news, the EURUSD has soared higher to 1.2975 and is up over 400 pips from last Friday's lows. Along with the Euro, riskier assets have rallied at the expense of the safe haven dollar and yen.

EURUSD

The weekend news has led forex traders back into the EURUSD. The key question is whether the buying has been fueled by short covering, or longer term investors. If short covering is the key driver, than the rally may not have legs to continue. Forex traders will be watching the 1.3000 figure. If we trade and close the day above that level, it may indicate renewed support for EURUSD.

Support/Resistance 1.2820/1.3000

GBPUSD

Along with the euro, the pound has been a big beneficiary of the weekend stabilization fund news. Also helping the pound is news that UK coalition talks are moving ahead, helping alleviate fears of a handcuffed UK government. Looking ahead, traders will be watching today's BoE MPC Meeting. Specifically, traders will be waiting to see if the BoE will reactivate its asset purchase program following the weekend's moves from the ECB and FED. Also

Support/Resistance 1.4775/1.4950

Gold

Starting the week, Gold opened up higher at 1210, as money being pumped into the market could lead to a pro-Gold inflationary environment. However, as the morning has proceeded Gold has dropped back below 1200 as market panic has declined. Looking ahead, Gold may continue to be vulnerable if EU credit levels stabilize.

Support/Resistance 11192/1210