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USDOLLAR

Fundamentally the Dollar is set to rally to 12,240 - 12,250 following an upward revision in 1st quarter GDP data and the build-up to the June FOMC meeting in which the Fed is expected to raise rates by 25bp in line with the three rate hike forecast since December. The final hurdle to cross is the June NFP due this coming Friday - in which only a strongly disappointing report can derail this plan. Strongly disappointing in this context would have to show less than March job growth, with its low number of 98k. Inflation remains on course according to the Fed, and fears that they are falling behind the curve will sustain pressure on the FOMC to hike the Fed Funds rate. Technically the FXCM USDOLLAR has been locked in a falling wedge pattern since December and the reversal from Mondays low has reconfirmed the lower trendline. As the falling wedge approaches narrowing convergence; the FXCM USDOLLAR is facing an imminent breakout during the second quarter - with fundamentals poi...
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EURUSD

Profit taking following a strong Euro rally as the market factored in Euro Zone resilience; along with a stronger US-DOLLAR will see the EURUSD correct to the downside in the short term with key support at 1.0900 levels. Overall Euro strength remains on deck in the medium term as the ECB is looking forward to possible tapering, along with a US-Dollar low which could see the EURUSD rally to 1.1400 - 1.1500 levels. These levels will not sustain, in the wake of German elections especially if the US-Dollar forms lows during June - July.   

GBPUSD

Along with US-Dollar strength and the downwards revision of 1st quarter UK GDP data, ongoing terror threats in the UK amidst political uncertainty with the upcoming snap elections in which May seems to be losing grounds; GBPUSD is set to correct to the downside with a minimal low of 1.2500.

AUDUSD

Following strong job growth during the 1st quarter the Aussie dollar proved resilient following China's rating downgrade amidst slumping commodity prices and is set to correct to the downside to the 0.7400 level in the build up to the June FOMC. With this level in mind the AUD is set to outperform the Euro, Pound and other comm dolls.

USDJPY

Yen continues to prove its strength as political risks drives investments into Japanese bonds and may outperform the US-Dollar in the short term in the build up to the FOMC. Should the Fed raise rates, the yen could be subjected to selling pressure as the rate differential widens. Abatement of political risks needed to curb Yen strength. Upcoming support level at 109.35

USDCAD

A hawkish BoC has helped the CAD to recover grounds amidst favorable economic conditions, however pressure on oil prices following disappointment in OPEC production cut extension and widening IR Differential with the states will keep the pressure on the CAD for now. Key resistance levels at 1.3730  

EURGBP

With Euro and Pound corrections underway the EURGBP is set to narrow into consolidation between 0.8600 - 0.8700 with a target of 0.8700 at the FOMC meeting. Technically the EURGBP is retracing from a trendline rejection at the 0.8750 high following the last two highs since January. Medium term lower target of 0.8500 should the UK terror threat abate and the elections outcome become clear.

GBPJPY

GBPJPY facing a downside breakout to 137.50 as the Pound corrects on its Apr-May gains and the Yen gaining on apparent geopolitical risks.