The Australian Dollar closed over parity on Thursday, setting up the potential for an acceleration to the upside. With both the Reserve Bank of Australia and the U.S. Federal Reserve moving in opposite directions, it seems that only overbought technical conditions could top this market at this time. The key to sustaining this rally is holding 1.00.
Central Bank Actions Give Euro Edge over Swiss Franc
Fundamentally the consensus is the Euro is stronger than the Swiss Franc. The Euro rose on Wednesday on the thought that the European Central Bank may be getting ready to implement a tighter monetary policy. This conclusion was supported by comments from European Central Bank Executive Board member Juergen Stark who said an easy monetary policy can have negative effects.
U.S. Dollar Under Pressure but Investors Still Jittery over European Banks
Pound Weakens; Investors Cite Worries over Austerity Measures
This morning the GBP USD continued its downtrend by breaking a minor .618 retracement level at 1.5457. Buyers stepped in to rally the Sterling, but the buying power wasn’t strong enough to post a daily closing price reversal bottom. At the midsession, the British Pound found resistance on a downtrending Gann angle from the 1.5997 top at 1.5757.
Stocks Called Flat; Counter-trend Rally May be Over
The September E-mini S&P 500 is trading flat to lower overnight. Last night’s range was inside of Tuesday’s range, indicating that traders are non-committal at this time. Yesterday’s rally was a follow-through move of Monday’s reversal bottom. This pattern usually leads to a 2 to 3 day rally equal to 50% of the last swing down.
Japanese Yen Traders Chose Safety over Intervention
Dollar Mixed Overnight; Traders Mull over G-20 Decision; U.S. Economic Reports
Optimism over Greece Bailout; Fed Commentary Boost Equities
Global stock markets are trading better which is leading to a call for a higher opening in the U.S. this morning. Traders are putting risk back on the table as tensions have eased in Greece due to the working out of a potential bailout plan. In addition, the Fed remained dovish in its FOMC policy statement which gave traders the green light to buy equities.
Euro Falls as Uncertainty remains over Greek Bailout Package
The Euro was under pressure throughout the New York session as uncertainty over the Greek bailout package encouraged more selling. Downside momentum dried up as the market approached last week’s low at 1.3443. This triggered a late session short-covering rally which helped erase close to half of its losses.
Dollar Falls after Beige Book Signals Recession May Be Over
The U.S. Dollar tried to regain some strength late in the trading session following the release of the Fed’s Beige Book but major buyers were noticeably absent driving the Dollar down into the close. Record low borrowing costs are contributing to the weakness in the Dollar and the strength in higher yielding assets. Investors have been selling the Dollar to fund their appetite for risk.