We have seen some good follow through from the overnight session with US equities reversing sharply on Tuesday. The DJIA, S&P and Nasdaq are up some 4.0%, 4.5% and 4.90% respectively, with the massive flow back into risk helping to bolster the Euro and all of the higher yielding currencies. The catalyst for today's market reversal and shift in sentiment seems to be coming from a number of contributing developments, all which have been quite well received. Earlier comments from Citi CEO Pandit who said that the bank was seeing its best quarter since it was profitable in 2007, along with Fed Chair Bernanke assurances that US banks will be well capitalized have been seen as the primary driver, while rumors of short covering in financial stocks and better than expected data out of the US today have also been seen bolstering confidence. Additionally, a report out from Moody's has been gaining some traction with market bulls after the rating agency said that concerns over the stability of the Eurozone are exaggerated. Nevertheless, the Euro has pulled back from its highs into the London fix with reported offers emerging from a European fund and US custodial accounts. The relative strength in Canada today is interesting with the single currency outperforming the Euro despite downbeat comments from a Canadian FinMin who has warned that the Canadian jobs data due out on Friday are not likely to be good. US consumer confidence (-49 expected) is set for release later this afternoon at 21:00GMT.


Eur/Chf - In Monday's Indicator of the Day commentary we talked about the cross and the potential for a bounce with the market confined to a choppy range and testing the lower Bollinger band. Today, we are getting confirmation, with the price now bouncing out from sub-1.4600 lows and putting in a strong bullish outside day. All relevant SMAs are above and we would look for additional gains back into the mid-range by 1.4900 at a minimum over the coming days. Only back below 1.4580 (6Mar low) negates.

Written by Joel Kruger, Technical Currency Analyst for
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