Forex Trading

A late day reversal in the USD/CAD, has seen the pair break below the 61.8% retracement level. The pair may test the next level of support at the March 10th low of 1.0214. A short term target below that will be the 1.0200 level. Key levels below that will be 1.0140 and 99.70 but it may be some time before the pair breaks Par. On the topside resistance will be found at the 100 Hour MA (blue line) at 1.0269 and then at the 200 MA at 1.0308.

The USD/JPY is holding for a second full day inside the Goalposts of the 100MA (90.14) and 200 Day moving averages (91.90.) The positive US data from this morning likely helped the pair stay inside. We will need to look at a shorter timeframe to see if there is potential for a move higher.

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The GBP/USD looks like a giant coil spring, or a wedge formation on the 1 Hour chart, as we start to see signs of the three’s a crowd rule. This rule states that when the price and both the 100 and 200 MA’s converge, there is bound to be a move in one direction or another. As traders we now do our analysis and get prepared in either direction as the market loads up pressure on the GBP/USD to move.

A burst of activity in the USD/CAD has pushed the pair hard up into the Goalposts, causing the pair to surge above the 100 hour MA (blue line) all the way to 1.0315 (200 Hour MA, green line) as seen in the 1 Hour chart.

Imports fall on oil and automobiles (-1.7%) Exports fall -0.3% as well. 

Initial Clams come in at 462K . As expected.

Canda Capacity Utilization is stronger at 70.9 while the Trade Surplus is higher at 0.8Billon C$.  House prices rise 0.4% as expected.

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Overnight the EURUSD bounced off the 100 hour MA at the 1.3618 ( the low reached 1.3621). The level also corresponds to the 38.2% retracement of the low to high range that has prevailed over the last 3 weeks  which adds to the significance.  The key level on the topside remains at 1.3691. A break above this level should solicit additional buying interest.  Conversely, a move back below the 1.3621 should solicit selling interest. 

Good Morning:

The EUR/USD pair was little changed in the overnight session.  Very narrow range bound trading with no clear direction evident.
GBP had a good day as it jumped over the 1.50 mark versus the USD, and rose across the board.

Says will act decisively to prevent “excessive” franc appreciation.

The question is, what level is excessive.  The market may look to probe where that is and start to use the 1.4630 level as resistance now.

Other comments include:

Swiss recovery remains fragile. Price stability is not a threat but deflation can not be ruled out. They see significant risk on global outlook, citing bleak budget outlook among global threats.  They see no discernable tightening of lending for 2 quarters.

For the Monetary Policy full release see:

http://www.snb.ch/en/mmr/reference/pre_20100311/source/pre_20100311.en.pdf