With the misery transcending from the Asian and European sessions, the US once again wants to have its say in the market! Japan was pressured by the Prime Minister's resignation and Europe was dismayed by the rising speculation over BP's futures as investors think the sharp drop in the market value might open the door for takeover bids!
Nonetheless, US futures were trading mainly higher and now the US market opened in green supported by the more than expected rise in pending home sales which surged 6.0% following an upside revision to the previous of 7.1% as Americans leaped to take advantage of the last month of tax credit.
The dollar held to its gains, and still marginally higher trading around 87.00 after touching the high of 87.17 and the low of 86.61.
The market is generally retrenching and that is dominantly seen in the ranged trading seen in the past period, greatly represented by the euro which though is still at its lowest in four years, it did slow the heavy selloff, and the other evidence was gold which declined today on the power of profit taking as the pessimism is gradually easing and turning into rationality.
The euro now is trading in midrange of the session around 1.22 areas after setting the high of 1.2273 and then bounced off lows set at 1.2173 at the strong support; the pair is likely to attack this level once again once it gathers the needed momentum targeting 1.2030 though failure to do so will take the euro to test its highs once again.
Sterling on the other hand is still trading bearishly where the pair declined from the highs set today at 1.4769 extending the downside move after breaching the support at 1.4635 reaching the low of 1.4562. Further bearishness might be expected shall the dollar withhold its gains which might lead sterling towards 1.4530.
As for the Japanese yen it continues to be hammered by Prime Minister Yukio Hatoyama's resignation while rising US futures and a good start for the session only extended the weakness. The yen is trading at its weakest versus the dollar where the pair inclined to set the high of 92.29 after earlier trading at the lows of 90.87 the pair is overbought yet we still see the potential for slight upside movement ahead of the activation of the crossover on Stochastic over intraday basis which will take the pair lower.
Nonetheless, the strong mover today is Loonie. Indeed, the Canadian currency is withstanding the tides as though it's a growth and commodity currency it ignored the morning pessimism from Asia and Europe and walked the path with crude to surge versus the dollar today on North American merits! The USDCAD managed to drop from early highs today at 1.0571 to set the lowest so fat at 1.0413 and still lingering around the lows today at 1.0422.