Following a well offered overnight session of trade, the greenback is only mildly offered against the Sterling and Swissy while showing some strength against the Euro and Yen. US equities have performed well thus far, with all indices up well over 1% on the day, led by the Nasdaq which is up closer to 2%. Meanwhile commodities have been trading flat to moderately lower.
Following a well offered overnight session of trade, the greenback is only mildly offered against the Sterling and Swissy while showing some strength against the Euro and Yen. US equities have performed well thus far with all indices up well over 1% on the day, led by the Nasdaq which is up closer to 2%. Meanwhile commodities have been trading flat to moderately lower. There has been a lot of talk this morning of heavy month-end/quarter-end fix related USD sell interest, but this has yet to materialize. US comptroller Dugan has been questioning the role of the FDIC in dealing with failing non-bank financial institutions, while Fed Stern has been addressing the “Too Big Too Fail” topic, admitting that policymakers grossly underestimated the scale of the problem. Stern went on to say that resolving this issue would be of the highest priority going forward. Also on the wires was George Soros who cited Eatern Europe as a “prime candidate” for IMF support. Data on the whole was weaker than expected in the US with consumer confidence, Chicago PMI and Case-Shiller all disappointing. In Canada, GDP came in as expected. The Australian Dollar has been the outperformer on the session, up nearly 2.0% against the USD with M&A related activity and a hawkish report from RBA watcher McCrann helping to give the antipodean the added boost.
ANALYSIS OF SELECTED RATES
Aud/Cad: The cross has surged today to easily clear the previous 2009 highs from early January at 0.8690 to trade well into the 0.8700’s thus far. However, we have been looking for an opportunity to fade the current rally with daily studies well overbought and the January 2009 high finally taken out. Scope from here is for a more significant corrective pullback over the coming days to allow for daily studies to unwind from stretched levels. Look for a move back below 0.8700 into the end of the day with deeper setbacks seen on a break below initial support at 0.8660. Position: SHORT @0.8715 FOR A 0.8515 OBJECTIVE, STOP @0.8840. Stops to be trailed to cost (break-even) on a break back below 0.8665. If 0.8665 not broken, position to be closed out at NY close (5pm EDT) on Tuesday.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
If you wish to receive Joel's reports in a more timely fashion, e-mail jskruger@fxcm.com and you will be added to the "distribution" list.
Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
