Previous Currency Trading Session Summary

The dollar started to weaken against the Euro from the early Asian session, with the pair finally breaking important USD1.4130.  Dollar weakness mainly due to risk appetite seen across all markets and especially in commodities, as oil reached yet another multi week high above $73 per barrel.  Equities, however, have experienced mixed fortunes with Europe down slightly and UK’s GDP figure posting the worst number since the late 1950′s.  In the US the S&P Case-Shiller Home Price Index 20 city composite fell 18.1% in the year ended April against economists’ forecast of a 18.6%.  The 10 city composite dropped 18% in April.

The EURUSD is trading to the upside once again with yesterday’s Dollar rally fading even as risk aversion creeps back.  Dollar needs to hold key levels against both British Pound and Euro of USD1.4 and USD1.66 if moves to the upside are to be maintained.  The next level for the Euro is USD1.4160 and any break and hold above puts USD1.4230 back in the frame.

Currency Market Expectation

EURUSD losses extend through USD1.4035 now as earlier mentioned bids and stops are taken out and traders’ sights turn to the London fixing.   However, flows may be balanced with Q2 squaring of positions.

British Pound pressing lower again, extending into areas of support between USD1.6515/00 (USD1.6505 76.4% USD1.6430/1.6745). A break below this level figure could open a deeper move toward USD1.6485/80 ahead of USD1.6470.

EURJPY is taking a hit with equities on the back of the US data, with bids emerging in the JPY135.30 area to cushion the fall.   Ahead now lie the high risk events of Thursday, including US Non Farm Payroll colliding with the European Central Bank policy meeting and statement so traders may now be squaring their long Euro positions, which were built when the market had a bigger appetite for risk.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.

Previous Currency Trading Session Summary

We start another week with a slightly stronger USD, this time helped by Chinese officials announcing that they are prepared to stay with the greenback as the reserve currency for the time being in the face of market rumours suggesting that they (and others – Russia & Venezuela to mention but two) have been looking for an alternative.   Despite this vote of confidence the euro vs dollar currency pair is trading in a very narrow range and is little changed from last week’s levels.  Trading volumes are thin in this holiday shortened week as a combination of the summer lull and 2nd Quarter position squaring and reconciliation kicks in keeping many traders on the sidelines.  The result is EURUSD unable to move much below USD1.4040.

In the UK both net lending and mortgage approval data came in below expectation which led to some early downward pressure on the British Pound.  However, any pullback is being seen as a buying opportunity with the pair so far touching USD1.6550.  A weekly close and hold above 1.66 still needed as evidence for a sustained move higher.

Currency Market Expectation

With an economic calendar almost devoid of any significant data traders are focusing on the ADP report of Wednesday and the NFP which, because of Friday’s 4th July celebrations, will be released on Thursday.   With the release of the ADP the market can begin speculating and moving.

The other important event of the week which traders are waiting for is the ECB’s interest rate decision and subsequent statement from Jean Claude Trichet.   This is probably the most eagerly awaited as Trichet should give the market some clear signals for the future direction of the EURO.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.