The USD had a day of mixed trading, which was a mirror image of the results from the U.S. equities markets. The USD lost value most of last week and as it went into the weekend it appeared to be on the back of its heels versus the EUR and GBP. The S&P and Dow both gained over 7.0% in last week�s trading which brought out a significant amount of risk appetite. The equity markets will remain in full view for investors this week as one hundred and fifty listed companies from the S&P 500 will be reporting quarterly earnings. On Friday the U.S. did release Building Permits and Housing Starts data. Both reports turned in better than expected numbers as the Building Permits release produced an outcome of .56 million compared to the forecast of .52 million and Housing Starts recorded a .58 million statistic � better than the estimate of .53 million.
Economic data from the U.S. will be quiet this week. Monday will be dominated most likely by market sentiment generated from equity markets, this because only the CB Leading Index will be published. Tomorrow Ben Bernanke is scheduled to testify before the House Financial Services Committee. Also making some impact in today�s trading session may be the news that CIT Corporation has basically agreed to a rescue deal via refinancing tools. News also emerged last night that Microsoft and Yahoo are discussing a possible deal. Yahoo famously turned down Microsoft about a year and a half ago but this time around they might not be able resist the security blanket that a giant like Microsoft can throw them. The USD took some punches last week as its gains made from the stock market weakness a couple of weeks ago evaporated. It might sound like a tired old song by now, but the USD is trading under the auspice of conditions from Wall Street and this will not likely change soon.
The EUR picked up some additional value on Friday as it got some additional energy from a market showing risking appetite. There was no major economic data released from the continent on Friday and today only the German PPI is on schedule. The German inflation report is forecasted to show a gain of 0.5% and it will be interesting to see what result emerges from this data. Germany and all of Europe have been keen to claim that deflation is not a concern. Publications will remain quiet until Wednesday when the broad European Industrial New Orders figures are on the calendar along with French Consumer Spending statistics. Making news this weekend was a speech given by ECB President Trichet as he warned European countries to do a better job of balancing their budgets. Which calls into question whose reality is true? Is Trichet actually that confident that European governments can effectively manage their financial concerns in the midst of this crisis or this some type of political game being waged with other influences in mind? The EUR traded in favorable positive territory all week as European bourses turned in good numbers and as long as this remains the scenario we may see the EUR perform well.
The Sterling turned in another good performance on Friday as it worked its way up to the stronger side of its range once again against the USD. It did this on a day without any significant U.K. economic data. Today will remain relatively quiet with only the Preliminary M4 Money Supply numbers on the calendar. Tomorrow things will pick up with the publication of the Public Net Borrowing data. The big risk events for the GBP from an economic data standpoint will be later this week with the Retail Sales numbers on Thursday and Prelim GDP report on Friday. Until then the Sterling may find itself like its counterparts trading at the whim of risk sentiment generated from likes of the FTSE, but traders will also keep their eyes on the range of the GBP - as it nears high water marks.
The JPY lost more ground to the USD going into the weekend as traders found themselves taking on more risk appetite. The Japanese marketplace is closed for a holiday today which should make for a light day of JPY trading. Gold continued to find takers and climb above the 940.00 USD mark, this as Crude Oil was taken higher on the back of better equity returns. The JPY will see dollar centric trading action today.
The pair is now floating in a tight range between the price of 1.4100 to 1.4180. However all oscillators on the daily chart are showing bullish momentum and the Bollinger Bands are also indicating an upcoming bullish move. Going long appears to be the right strategy.
The pair is now floating around the price of 1.6430. All oscillators on the daily chart are showing bullish momentum and the Bollinger Bands are also indicating an additional upcoming bullish move. Going long appears to be the right decision.
The bullish channel on the daily chart continues. The Slow Stochastic on the daily chart is showing continued bullish movement and is supported by the RSI. Going long appears to be the preferable strategy.
After the continuation of the bearish trend, the pair is now floating in a tight range between the 1.0717 to 1.0755 level. On the daily chart The RSI is floating around the 60 level which do not provide a clear direction. The preferred strategy today will be to wait for a clearer signal before taking any position.
The Wild Card
Crude oil is now in the bullish corrective movement. All oscillators on the 4 hour chart are pointing up indicating that the price already made his correction. Going long appears to be preferable.