MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
A very exciting session of trade with the USD and Yen selling accelerating into the London fix as the markets continue to buy into the recovery prospects for the global economy. The stronger earnings releases this morning along with a better than expected existing home sales print have been sourced as the primary catalyst for the latest moves, with the Dow breaking above 9000 for the first time since January. Also adding to the solid risk appetite has been the release of the Bank of Canada monetary policy report which highlighted the central bank opinion that the recession was ending in the current quarter. This helped to propel the Canadian Dollar into the top performing slot on the day. Bank of England Sentance was on the wires late warning that further shocks and bad news could not be ruled out, which managed to weigh on Sterling against some of the other major currencies on speculation that it could have been a warning of tomorrow’s highly anticipated GDP result. US equities are all very well bid with the major indices up over 2% on the day. Commodities are also well bid on similar themes.
ANALYSIS OF SELECTED RATES
Usd/Cad: The daily RSI has now officially crossed into oversold territory below 30 and with the market severely overdone intraday, we have opted to establish a playable counter-trend long into the afternoon. Any dips below 1.1000 are viewed as an excellent medium-term opportunity, with our core view still bullish USDs, despite the severe pullback of the past several days. We also feel that the relative strength in the Canadian Dollar is somewhat unjustified, with the Euro still trading well below the 1.4340, 2009 lows and other commodity currencies lagging. POSITION: LONG @1.0875 FOR AN OPEN OBJECTIVE, STOP @1.0675.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
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“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected Rates.
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