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Intraday Forex Technical Report

U.S. Update: Directionless market defined by U.S. data

Mon, Nov 2 2009, 16:38 GMT
by Valeria Bednarik

FXstreet.com Independent Analyst Team

What happened

Despite week started with dollar and yen higher against major rivals, movement did not last and high yielders revert early opening loses, to spent all the European morning directionless; with Euro and Swiss Franc practically unchanged from past Friday’s closing levels, Pound slump to an intraday low of 1.6330 after plans surfaced over the weekend to create three new banks from sold-off assets of three major U.K. banks that had been bailed out by the government. Also market is likely pricing in more QE to come this Thursday’s BOE meeting.

USD/JPY that reached 89.15 pre interbank opening, regained the upside to consolidate just under the 90.00 level, while EUR/USD consolidated between 1.4740/1.4800, after better than expected manufacturing data in the euro zone and Sweden offered market players some relief over global economic conditions.

What to expect

After market has hesitated since Asia opening, U.S. better than expected data finally decided dollar destiny: the safe haven along with it’s counterpart the Japanese yen are falling heavily with Wall Street strongly up and gold reaching 1060/oz, after the release of better than expected ISM PMI that hit 55.7, while Pending Home Sales rose above expectation 6.1%.

Ahead of a week fulfill by critical economic data, that includes the policy meeting of 3 central banks, Australia, ECB and BOE, and U.S Non Farm Payrolls, risk appetite has seems to resume. However, expect markets to stretch as key data approach.

EUR/USD Outlook

Pair failed several times to break the 61.8% of the last daily rally around 1.4700, suggesting a corrective movement before next up movement. However, the upside also remains limited by the 1.4840 area, 38.2% of the same rally, while 20 SMA in the daily comes to offer resistance at the same exact zone. Daily close above this area, will support the upside bias, while as long as between levels, there are no clear perspectives for the pair. 

Published on  Mon, Nov 2 2009, 16:38 GMT