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DOLLAR: With a number of global equity markets showing signs of noted strength today (even the Nikkei was up aggressively) one gets the impression that flight to quality interest is falling and the interest in risk associated currencies is on the rise. In short, the trade seems to want out of the Dollar and into what is thought to be undervalued Non Dollar currencies. Apparently the currency markets don’t need much in the way of data to foster ideas that the global recovery remains in place and therefore we suspect that the Dollar will remain weak this morning, even in the face of a slight decline in US retail sales readings. In fact, the June Dollar index this morning has already fallen to the lowest level since early February and would appear to be capable of a very weak trading session ahead. However, the market did see some better than expected Euro zone Industrial production readings overnight and that might have given the Dollar sellers an added incentive. Technical traders might point to a gap in the June Dollar Index down at 79.91 to 79.86 as an initial target for the Friday morning trade in the Greenback.
EURO: As suggested already, concerns toward the Greek debt situation are mostly missing from the headlines and given an early upward thrust in US equities, traders are apparently showing definitive buying interest in the Euro. With the Euro zone also managing to post a very impressive Industrial production reading overnight, one might also suggest that the Euro is even seeing macro economic differential buying in the early Friday morning trade. Apparently the market was fully capable of discounting the fifth straight decline in Greek GDP readings overnight and that highlights a trade that is fixated on increasing its risk holdings at the expense of the Dollar. A big range up extension on the Euro chart would seem to leave little in the way of chart resistance until the 1.3834 level.
YEN: With the Dollar down sharply this morning and the Yen not definitively benefiting from that action, it is clear that pressure generally remains in place on the Yen. In fact, if the weak Dollar weren’t providing a measure of support to the Yen today, we suspect that the June Yen might have fallen to the lowest level since February 23rd on the charts. On the other hand, the markets are sensing progression in the global recovery, with the Nikkei even posting stellar gains overnight. Therefore the path of least resistance in the Yen looks to remain down, with a near term slide below 110.00 probable in the coming trading sessions.
SWISS: Apparently the trade isn’t overly concerned about SNB intervention holding the Swiss down. In fact, we suspect that the SNB realized that today’s strength would be too much to stand in the way of. With a number of technical areas violated on the charts we suspect that a certain amount of technical stop loss buying is capable of extending the Swiss rally on the upside. There would appear to be little in the way of resistance on the charts until the 95.00 level.
POUND: The Pound looks to be coming alive in the wake of a lot of positive outside market action. In the face of discouraging economic sentiment, the Pound is apparently a high beta decliner, but in the face of optimism, the trade apparently expects the Pound to benefit from concentrated short covering action. Apparently the Pound saw some support from news that Conservatives in the UK are once again thought to be capable of winning a majority in the upcoming election. Perhaps some Pound buyers were emboldened by BOE talk this morning, that gave equal time to tightening and easing issues. In the recent past, the trade assumed that the UK economy was so weak that the only decision from the BOE was to go forward with quantitative easing.
CANADIAN DOLLAR: With the overall macro economic tilt upbeat this morning, that should feed right into the recent pattern of strength in the Canadian Dollar. In fact, the fresh round of new highs in many equity measures overnight and general interest in risk instruments would seem to be confirmation of the bullish trend in the Canadian over the last two weeks. In short, we suspect that the Canadian is poised to reach the highest level since October 2009.
TODAY’S MARKET IDEAS: Expect everything to gain against the US Dollar today.
Currency Market Commentary – 2010.03.12
by Dave Hightower on March 12, 2010
Below is a sample of our Daily Commentary. To get this comment, and our daily coverage of 15 additional markets and trade ideas, visit futures-research.com for your free 2 week trial!
DOLLAR: With a number of global equity markets showing signs of noted strength today (even the Nikkei was up aggressively) one gets the impression that flight to quality interest is falling and the interest in risk associated currencies is on the rise. In short, the trade seems to want out of the Dollar and into what is thought to be undervalued Non Dollar currencies. Apparently the currency markets don’t need much in the way of data to foster ideas that the global recovery remains in place and therefore we suspect that the Dollar will remain weak this morning, even in the face of a slight decline in US retail sales readings. In fact, the June Dollar index this morning has already fallen to the lowest level since early February and would appear to be capable of a very weak trading session ahead. However, the market did see some better than expected Euro zone Industrial production readings overnight and that might have given the Dollar sellers an added incentive. Technical traders might point to a gap in the June Dollar Index down at 79.91 to 79.86 as an initial target for the Friday morning trade in the Greenback.
EURO: As suggested already, concerns toward the Greek debt situation are mostly missing from the headlines and given an early upward thrust in US equities, traders are apparently showing definitive buying interest in the Euro. With the Euro zone also managing to post a very impressive Industrial production reading overnight, one might also suggest that the Euro is even seeing macro economic differential buying in the early Friday morning trade. Apparently the market was fully capable of discounting the fifth straight decline in Greek GDP readings overnight and that highlights a trade that is fixated on increasing its risk holdings at the expense of the Dollar. A big range up extension on the Euro chart would seem to leave little in the way of chart resistance until the 1.3834 level.
YEN: With the Dollar down sharply this morning and the Yen not definitively benefiting from that action, it is clear that pressure generally remains in place on the Yen. In fact, if the weak Dollar weren’t providing a measure of support to the Yen today, we suspect that the June Yen might have fallen to the lowest level since February 23rd on the charts. On the other hand, the markets are sensing progression in the global recovery, with the Nikkei even posting stellar gains overnight. Therefore the path of least resistance in the Yen looks to remain down, with a near term slide below 110.00 probable in the coming trading sessions.
SWISS: Apparently the trade isn’t overly concerned about SNB intervention holding the Swiss down. In fact, we suspect that the SNB realized that today’s strength would be too much to stand in the way of. With a number of technical areas violated on the charts we suspect that a certain amount of technical stop loss buying is capable of extending the Swiss rally on the upside. There would appear to be little in the way of resistance on the charts until the 95.00 level.
POUND: The Pound looks to be coming alive in the wake of a lot of positive outside market action. In the face of discouraging economic sentiment, the Pound is apparently a high beta decliner, but in the face of optimism, the trade apparently expects the Pound to benefit from concentrated short covering action. Apparently the Pound saw some support from news that Conservatives in the UK are once again thought to be capable of winning a majority in the upcoming election. Perhaps some Pound buyers were emboldened by BOE talk this morning, that gave equal time to tightening and easing issues. In the recent past, the trade assumed that the UK economy was so weak that the only decision from the BOE was to go forward with quantitative easing.
CANADIAN DOLLAR: With the overall macro economic tilt upbeat this morning, that should feed right into the recent pattern of strength in the Canadian Dollar. In fact, the fresh round of new highs in many equity measures overnight and general interest in risk instruments would seem to be confirmation of the bullish trend in the Canadian over the last two weeks. In short, we suspect that the Canadian is poised to reach the highest level since October 2009.
TODAY’S MARKET IDEAS: Expect everything to gain against the US Dollar today.
Tags: Canadian, Currencies, Dollar, Euro, Financials, Pound, Swiss, Yen
About Dave Hightower