- Coming Up Today (all times GMT)
- GBP Revised GDP (8:30)
- USD Consumer Confidence (14:00)
A late selloff of US equities has caused risk aversion to return to the markets as Asian and Pacific stock indexes have tanked. Also, reports have surfaced that North Korea has been preparing its soldiers. As such, riskier currencies are lower across the board against the dollar, with the AUDUSD especially being hit hard as it is down nearly 1.0% this morning to 0.8200.
Last week's rally has fizzled, and Forex traders are back in selling mode. Yesterday's news that the Spanish government was taking over a failing bank has reinforced the notion that traders should short every EURUSD rally until concrete evidence that the EU's credit problems have stabilized.
Weakness in the GBPUSD continues as traders are growing skeptical towards the UK's proposed budget cuts. Nonetheless, with so many one sided positions in the market, the GBPUSD could be poised for a sharp short squeeze if today's GDP is better than expected. Beyond the intraday resistance of 1.4465, there is strong resistance at the 1.4530 level.
Renewed interest is brewing in Gold as the aforementioned global worries have led commodity traders back into the safe haven metal. Also helping is New Zealand Inflation Expectation numbers this morning that were higher than expected. Therefore, the 1200 is back in play, and any move above this key figure could lead to follow through buying towards the 1225 level.