CROSS COUNTRY: MIDDAY SNAPSHOT & ANALYSIS OF SELECTED CROSS RATES
The buck has fallen slightly back into favor in the US session of trade with little in the way of any specific event risk to influence price action. [B]Data[/B] released this morning has failed to materially factor into price action with producer prices mildly weaker and housing numbers better than expected. In Canada data was also mixed. Risk appetite overall seems to be fading with overseas equities tracking lower. US equities however are managing to impressively hold up thus far, with the NASDAQ leading the way. Bank of Italy Draghi and ECB Stark have recently been on the wires touting their hawkish stance and stating that there is little room for additional ECB cuts. The IMF has just come out with a new forecast for the global economy, calling for a 0.6% contraction in 2009 versus a previous call for 0.5% growth. On the commodity front, oil has been rallying now up some 2.00% on the day, with the latest threat of production cuts from the Algerian Energy Minister attributed to some of the demand. Looking ahead, US consumer confidence (-48 expected) is due out at 21:00GMT. All eyes will then turn to Wednesday’s much anticipated FOMC.
ANALYSIS OF SELECTED RATES
Usd/Nok – Trades closer to the medium-term range lows following the latest drop out from the multi-month range highs by 7.30 on March 3. However, Monday’s price action was indeed bullish after rallying sharply to close in positive territory following early setbacks down to 6.70. The result was the formation of a bullish hammer close and bullish outside day which could now signal the start of the next push back to the range highs. A break back above Monday’s high at 6.89 will be required to confirm, and we recommend establishing longs on this break. Ultimately any additional weakness should be well supported by 6.60.
Written by Joel Kruger, Technical Currency Analyst for DailyFX.com
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