The markets continue to interpret the Fed introduction of quantitative easing as extremely USD bearish with the greenback extending declines across the board into the London fix. Most recently, option barriers above 1.3700 in Eur/Usd have been triggered, with next key resistance now coming in by the 1.3800, January 8 high. Also contributing to the USD demise has been the removal in the Fed statement of any hopes for recovery in 2009. The latest IMF report has been getting some attention after warning of even greater financial stress ahead. The IMF recommends that the G20 adopt a cohesive strategy to deal with the crisis. EU Juncker has been on the wires echoing recent remarks that there is no need for additional fiscal stimulus. The Russian central bank has been attracting attention this morning with rumors that they have been intervening to buy USDs. The SNB is most probably not happy with the recent USD slide given their recent outward stance on the concerning appreciation in the Swissy, and all eyes will be on SNB Jordan who is slated to speak at 16:00GMT today. On the data front, releases out of the US were on the whole better with initial jobless claims, Philly Fed, and leading indicators all exceeding expectations. US equities are mildly offered while commodities are higher on the day. Oil is the clear winner, back above $50 and up by some 7.00% at present.
ANALYSIS OF SELECTED RATES
Usd/Mxn – Has been in the process of a violent drop off of the historic highs by 15.60 from 9 Mar, reaching 13.72 on Thursday ahead of the latest minor bounce. The drop has resulted in 7 consecutive down days and 7 consecutive daily lower highs and lower lows. However, with the market now oversold and failing to establish below the 100-Day SMA today, we like the idea of looking to establish a long position at current levels. Currently the daily set-up looks to be taking the form of a bullish dragonfly doji which confirms the potential basing. Strategy: BUY @14.00 FOR A 14.70 OBJECTIVE, STOP @13.60.
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)
