• Home ::
• Technical ::
• Market View ::
• Intraday Forex Technical Report

• Send
• Print
• Add To
• Rss

Intraday Forex Technical Report

102016a6-b41f-4951-8d47-fd959d5b4a3a

8

0

U.S. Update: Gold halting dollar recovery

Tue, Nov 3 2009, 15:44 GMT
by Valeria Bednarik

FXstreet.com Independent Analyst Team

What happened

With markets close in Japan due to holiday, thin conditions exacerbated moves across the board, and we are currently seen the consequences. Action started after RBA rose rates to 3.5%, 0.25 bp as expected, triggering a spike of risk appetite against majors.  However, the lack of confirmations of further rate hikes ahead, quickly reverted the situation in the market, and after Aud fall majors follow favoring a strong greenback recovery that extended during European morning, as optimism fades. Japanese Yen however, didn’t follow its safe haven counterpart, and remained in tight ranges against major rivals.

Early European data show U.K. Construction spending fell to 46.2, not only under expectations, also under previous month reading of 46.7, triggering more pessimism across the board. European stocks fell sharply, along with oil, making EUR/USD break key support zone around 1.4680/1.4700, from where the pair fell to an intraday low of 1.4625; trading close to that level and under previous support now strong resistance, greenback is consolidating last win ground, prepare to extend the movement.

Pound reached the 1.6250 strong static area, also 20 SMA in the daily chart, starting a strong come back from that level, still trading inside previous day’s range. Pair likely to remain range bound ahead of BOE this Thursday, with clearer definitions to come after the more QE mystery unveils.

What to expect

If something is halting dollar from running higher, is gold: the commodity is quoting around $ 1068/oz, close to historical highs and pushing higher, while U.S. stocks remain in negative territory after U.S. factory orders come under expectations, despite improving to 0.9% from previous month reading of -0.8%.

EUR/USD remains subdue, close to daily lows, and unable to retest the 1.4680/1.4700 area. Fresh intraday low could trigger more downside movements for the next hours.

GBP/USD is in better shape, regaining some upside strength, still under 1.6410/40 key resistance zone; seems hard to see a break above that level pre BOE.

USD/JPY remains consolidating between 90.30/90.70 area, favored by gold rises, and ignoring for now, the slump in stocks.

At this point, seems that we need to expect the main fundamental events of the week, (FOMC, ECB and BOE, followed by U.S. Nonfarm Payrolls) to find clearer long term definitions in currencies.

Yet keep an eye on gold: breaking higher could revert current market conditions quite fast.

Published on  Tue, Nov 3 2009, 15:46 GMT