Definitely a very interesting session of morning trade with the price action potentially signaling a shift in market sentiment towards the USD. Initially, following the release of the better than expected NFP number, the USD was sold quite heavily, but the move was not to be sustained with a fierce reversal taking place to massively overshadow any initial USD weakness post the release.
[B]MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES[/B]
Definitely a very interesting session of morning trade with the price action potentially signaling a [B]shift in market sentiment[/B] towards the [B]USD[/B]. Initially, following the release of the better than expected[B] NFP [/B]number, theUSDwas sold quite heavily, but the move was not to be sustained with a fierce reversal taking place to massively overshadow any initial USD weakness post the release. Heavy stops were tripped in [B]currencies[/B] with the Greenback extending gains from previous sessions and accelerating on the back of comments from [B]Fed Lockhart [/B]who said that the central bank would [B]soon need to consider raising rates[/B]. It seems as though market participants have started to factor a recovery in the global economy as potentially being somewhat USD bullish. The added jolt of a potential tightening in monetary policy also has had a favorable impact on [B]yield differentials[/B] in favor of the buck. The [B]Canadian Dollar[/B] has been hit the hardest on the day, with the [B]weaker employment numbers[/B] earlier in the morning fueling some additional relative weakness in the Loonie. Also continuing to generate much attention has been the collapse within the [B]UK government[/B] as more resignations hit the wire each hour. [B]PM Gordon Brown[/B] is set to give a press conference, with many speculating that Brown will step down. [B]US equities[/B] track higher into the London Fix, while[B] commodities[/B] show weakness. Looking ahead, [B]Fed Yellen[/B] and [B]Rosengren [/B]are slated to speak at 18:15GMT, while [B]consumer credit[/B] (-$6.0B expected) is due shortly after at 19:00GMT.
ANALYSIS OF SELECTED RATES[/B]
[B]Usd/Jpy:[/B] The pair has been on fire today since breaking above recent triangle consolidation highs at 97.25, trading to 98.20 thus far ahead of the latest minor pullback. However, scope for additional gains are limited, particularly on Friday, with hourly studies highly overbought and the ATR(Average True Range) being well exceeded. Additionally, longer-term studies show the daily chart now just testing falling trend-line resistance off of the 101.45 2009 highs from early April. Overall, the medium-term structure is still quite bearish and we look for trend-line resistance by today’s highs at 98.20 to cap ahead of a resumption of the underlying downtrend. A fresh lower top is now sought out below 99.75, ideally by 98.20 to be confirmed on a break back below 93.85.[B] Position: SHORT @98.00 FOR AN OPEN OBJECTIVE, STOP @100.20.
[B]Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:
[I][B]“Tech Talk”[/B] – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade. [/I]
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]
Monday-Friday (between 8:00am-9:00am EST)
[I][B]“Cross Country” [/B]– A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates. [/I]
Monday-Friday (between 10:30am-11:30am EST)
[I][B]“Scandi Daily”[/B] –[/I] [I]A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. [/I] (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
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[I][B]“Daily Classical”[/B] – A Daily Technical Overview of the Major Currencies. [/I]
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