Thursday, June 25, 2009

Forex Update

Treasury Bond Daily Commentary for 4.2.09
The rally in the 30 Year T-Bond futures faded yesterday after the U.S. released better than expected housing and manufacturing data, sending equities higher and treasury futures lower.

However, the 30 Year futures are recovering Thursday after the U.S. released more negative unemployment data. Hence, with the U.S. taking care of the excess supply of treasuries via quantitative easing, the 30 Year futures are falling in line with their ordinary negative correlation with the S&P futures. The futures are struggling with the concept of retesting March highs. There’s certainly a wide range the 30 Year futures have to deal with to the upside. Therefore, the futures have their work cut out for them.

S&P Daily Commentary for 4.2.09
The S&P futures brushed aside negative unemployment data, piecing together an impressive rally on the back of better than expected existing home sales and manufacturing data. The economic crisis began with the collapse of America’s housing market, so stabilization in housing gives investors hope the worst of the economic crisis may be behind us.

EUR/USD Daily Commentary for 4.2.09
The EUR/USD has pushed through March 30 highs, rallying before the ECB announces its monetary policy decision. While the 50 basis point cut analyst expect is likely, investors will be more interested in what Claude Trichet has to say about the ECB's potential use of quantitative easing.

Trichet will likely say the ECB doesn't need to cut the benchmark rate further. However, this is what the ECB has said after each of their other rate reductions.

As a result of investor apprehension, the EUR/USD is showing limited gains as compared to other major Dollar pairs such as the GBP/USD and AUD/USD. Nevertheless, the EUR/USD will likely follow its positive correlation with U. S. equities.

GBP/USD Daily Commentary for 4.2.09
The GBP/USD catapulted after rising above our 2nd tier uptrend line, surging well beyond the psychological 1.45 barrier. In fact, the Cable peaked past our 3rd tier trend line before retreating as investors take profits before challenging March highs.

Britain continues to receive good economic data including yesterdays Manufacturing PMI and today's Construction PMI and Nationwide HPI numbers.

In other words, the manufacturing and construction industries are looking up in Britain while home prices are actually on the rise.

EURO USD Forex Trading Tips and Analysis for Day Traders
Rate holds point of indecision so far today; late break fails to attract more bids but still solid above the 100 day MA. Traders note strong offers above the 1.3330 area but bids are absorbing those for now with a foothold over the 1.3300 handle to signal a short-squeeze.

Rate has two-way action suggesting a try for stops above. Rate likely has stops building in both directions but shorts have taken minor control of the market as the rate gives back gains over the 1.3400 area last week late. Action remains two-way; any move lower is likely supported on dips.

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