[B]MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES[/B]
The relative strength in[B] Sterling[/B] on Tuesday persists into the London Fix with the single currency benefiting greatly from the[B] inflation data shock [/B]and resurgence in risk buying. Much of the morning US session was dominated by [B]stop hunting[/B] in spec accounts caught long USDs, with Russian, Middle Eastern and US investment accounts all heavy buyers of currencies and sellers of [B]USD[/B] and [B]Yen[/B]. Also seen bolstering risk appetite were comments from the[B] IMF[/B] that a [B]global recovery was underway[/B]. Elsewhere, [B]SNB Jordan [/B]was on the wires saying that central bank was happy with [B]Eur/Chf[/B] at current levels and cited the positive impact the exchange rate was having on the economy. US[B] producer prices[/B] were softer than expected, while[B] housing starts[/B] and [B]building permits[/B] were also weaker. US [B]equities[/B] are well bid on the day, while [B]commodities[/B] are also higher.
[B]ANALYSIS OF SELECTED RATES
[/B]
[B]Gbp/Usd:[/B] Although Monday’s bearish price action has now been totally negated, we retain our bearish outlook and will look to take advantage of the choppy market conditions to establish a fresh short trade on Tuesday. Hourly studies are now looking well overbought and the market has also exceeded its daily average true range of 200 points. There is a confluence of resistance by 1.6580 in the form of the 10/20-Day SMAs, and 78.6% fib retrace off of the recent 1.6665-1.6275 move, and as such we will look to take advantage and sell on a push into this confluence. [B]STRATEGY: SELL @1.6580 FOR AN OPEN OBJECTIVE, STOP @1.6780.[/B] [B]RECOMMENDATION TO BE REMOVED IF NOT TRIGGERED BY NY CLOSE (5PM ET) ON TUESDAY.
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[B]Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Monday-Friday (between 5:30am-6:30am EST)
[I][B]“Morning Slices”[/B] – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).[/I]
Monday-Friday (between 6:30am-7:30am EST)
[I][B]“Indicator of the Day”[/B] – [/I][I]A Feature Report that Highlights our Most Significant Technical Indicator of the Day. [/I]
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[I][B]“Midday Snapshot” [/B]– A Midday Fundamental Update, along with Technical Analysis of Selected Rates. [/I]
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