MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
Currencies are relatively unchanged since opening in the US, with only the Yen offered somewhat on higher equity prices. The data out of the US this morning has come in on the weaker side, but hardly factors into price action with market participants not assigning any real weight in the Chicago national activity index and Dallas Fed manufacturing. Fed Rosengren has been on the wires with some upbeat comments after saying that the US will resume its growth path in the coming months. Elsewhere, the UAE central bank governor was out earlier with some USD supportive comments after saying that he sees no real alternative to the buck, while fears of inflation would prevent other nations to promote their currencies as alternatives. Kiwi and Sterling continue to outperform on the session, with Kiwi particularly benefiting from the improved investor sentiment. Sterling has done well aided by a well received BOE reverse auction. The Yen is the weakest currency on the day. US equities trade higher, led by the DJIA up by some 1%. On the commodity front, oil has been rallying to trade back above $71, while gold is marginally lower. Bernard Madoff has been sentenced to the maximum 150 years in prison but this has failed to influence the markets.
ANALYSIS OF SELECTED RATES
Gbp/Cad: The cross has been rallying quite sharply since early June with the market extending to fresh 2009 highs beyond 1.9000 and just shy of 1.9200 thus far. However, daily studies are finally looking quite stretched with the RSI finally breaking above the critical 70 level. Next key resistance comes in by 1.9200-55 (61.8% of 2008 high to 2009 low/21Nov high) and look for gains to stall out above 1.9200 ahead of a much needed and healthy corrective pullback. The closest relevant SMA in the form of the 10-Day, comes in at 1.8830 and we would look for a pullback at a minimum to this level before even considering bull trend resumption. Strategy: SELL @1.9235 FOR AN OPEN OBJECTIVE, STOP @1.9435. Recommendation to be removed if not triggered by NY close (5pm ET) on Monday.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
If you wish to receive Joel's reports in a more timely fashion, e-mail [email protected] 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)
“Midday Snapshot” – A Midday Fundamental Update, along with Technical Analysis of Selected 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 [email protected] 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)
