Coming Up Today(all times GMT)

  • CAD Housing Starts (12:15)
  • GBP Consumer Confidence (23:01)

In a speech last night, Fed Chairman Ben Bernanke issued cheerful comments about the US economy and stated that the US should avert a double dip recession. Specifically, he pointed out growth in consumer spending and investments. Regarding employment, which has become a focal point to Forex traders following last Friday's disappointing NFP numbers, Bernanke stated that the US's 3% economic growth is great on an overall level, but not strong enough to meaningfully lower the unemployment rate. Concerning Europe, Bernanke stated that he supported the actions that European leaders were taking to curb contagion hitting the US.

As expected, these optimistic comments have led to risk appetite buying this morning, as the Euro, Aussie, and Asian Rim stocks have moved higher today.

EURUSD

Moving higher today thanks to comments from Bernanke, however strong resistance at 1.2000 remains. Without a sustained move above this level Forex traders will probably be selling into every rally. Therefore, the pair remains very vulnerable and any negative news can easily cause it to trade back below 1.1900.

Support/Resistance 1.1915/1.2000

GBPUSD

The GBPUSD traded higher yesterday and broke out to highs of 1.4570 after trading above 1.4500 resistance. Currently, the pair has retraced some of yesterday's move, however buyers are supporting the pair around 1.14460. Therefore, if European stock markets hold their pre-market gains and risk appetite continues, we could easily see another move towards yesterday's highs and beyond.

Support/Resistance 1.4460/1.4570