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DOLLAR: The Dollar has made a strong rally overnight, recovering all of the post-FOMC losses and reaching a new high for this rebound rally. An initial knee-jerk reaction towards the Fed’s actions has been replaced by a more pessimistic attitude for global economic prospects. The Dollar has been able to find some safe-haven support, particularly after a Chinese government planning agency stated their expectations for the US recovery to continue while casting doubt on the Euro zone and Japan. With the global selloff in equities during overnight hours, this current Dollar strength may be extended well into today’s trading. If sentiment continues to deteriorate, the market may be at a turning point for the Dollar’s longer-term direction. For now, look for the Dollar to find resistance near the 82.00 level as this rally gains more momentum.
EURO: The September Euro has come under heavy pressure over the past few hours, and has fallen further away from the recent highs for the move. With the Fed already dampening sentiment for the global markets, today’s statements from the Chinese towards the Euro zone are in sharp contrast to the optimism from earlier in the month. With risk concerns becoming more of a factor as the week goes on, this current plunge is likely to gain further momentum. The September Euro should find support near the 1.2980 level, but a further acceleration to the downside may occur if the markets cannot shake today’s negative tone.
YEN: Today’s flare up in risk has helped the September Yen to approach new 15-year highs, in spite of recent weak Japanese economic data. With authorities in Japan appearing to be more tolerant of recent Yen strength, there may be a test of those highs soon if the global move out of equities picks up steam. Look for the September Yen to find resistance at the 117.90 level, but a move beyond that area may need further deterioration from other markets.
SWISS: The September Swiss has not able to benefit from heightened risk concerns with the markets, giving back a good portion of yesterday’s late recovery. With other problem areas taking the market’s attention, relatively good economic condition in Switzerland may help to support the September Swiss during this market turbulence. The September Swiss is likely to find support near the 94.60 level, but any strong move back towards the highs may require a major improvement with global sentiment.
POUND: Yesterday’s late revival of the September Pound has been reversed this morning, as elevated market risk has derailed the longer-term rally. A report from the Bank of England which projects low inflation levels going forward has added to the pressure, and sent the September Pound diving to new lows. Look for the September Pound to test support near the 1.5660 this morning, but will need a vast turnaround in sentiment in order to reverse this selloff.
CANADIAN DOLLAR: The revival of risk concerns with the market continues to plague the Sept Canadian, which has returned towards yesterday’s lows over the last few hours. There may be little chance that the Sept Canadian can turn this downmove around as long as global equity markets are under pressure, but the generally positive view towards the Canadian economy may be enough to keep this slide from getting out of hand. Look for the Sept Canadian to find support near the 96.18 level during today’s session.
TODAY’S MARKET IDEAS: The Dollar will continue to gain ground, as long as sentiment for global markets remains weak. The September Yen will also benefit from risk aversion support, but look for the September Swiss to make a turnaround if risk concerns can be dampened over the next few hours.
Currency Market Commentary – 2010.08.11
by Dave Hightower on August 11, 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: The Dollar has made a strong rally overnight, recovering all of the post-FOMC losses and reaching a new high for this rebound rally. An initial knee-jerk reaction towards the Fed’s actions has been replaced by a more pessimistic attitude for global economic prospects. The Dollar has been able to find some safe-haven support, particularly after a Chinese government planning agency stated their expectations for the US recovery to continue while casting doubt on the Euro zone and Japan. With the global selloff in equities during overnight hours, this current Dollar strength may be extended well into today’s trading. If sentiment continues to deteriorate, the market may be at a turning point for the Dollar’s longer-term direction. For now, look for the Dollar to find resistance near the 82.00 level as this rally gains more momentum.
EURO: The September Euro has come under heavy pressure over the past few hours, and has fallen further away from the recent highs for the move. With the Fed already dampening sentiment for the global markets, today’s statements from the Chinese towards the Euro zone are in sharp contrast to the optimism from earlier in the month. With risk concerns becoming more of a factor as the week goes on, this current plunge is likely to gain further momentum. The September Euro should find support near the 1.2980 level, but a further acceleration to the downside may occur if the markets cannot shake today’s negative tone.
YEN: Today’s flare up in risk has helped the September Yen to approach new 15-year highs, in spite of recent weak Japanese economic data. With authorities in Japan appearing to be more tolerant of recent Yen strength, there may be a test of those highs soon if the global move out of equities picks up steam. Look for the September Yen to find resistance at the 117.90 level, but a move beyond that area may need further deterioration from other markets.
SWISS: The September Swiss has not able to benefit from heightened risk concerns with the markets, giving back a good portion of yesterday’s late recovery. With other problem areas taking the market’s attention, relatively good economic condition in Switzerland may help to support the September Swiss during this market turbulence. The September Swiss is likely to find support near the 94.60 level, but any strong move back towards the highs may require a major improvement with global sentiment.
POUND: Yesterday’s late revival of the September Pound has been reversed this morning, as elevated market risk has derailed the longer-term rally. A report from the Bank of England which projects low inflation levels going forward has added to the pressure, and sent the September Pound diving to new lows. Look for the September Pound to test support near the 1.5660 this morning, but will need a vast turnaround in sentiment in order to reverse this selloff.
CANADIAN DOLLAR: The revival of risk concerns with the market continues to plague the Sept Canadian, which has returned towards yesterday’s lows over the last few hours. There may be little chance that the Sept Canadian can turn this downmove around as long as global equity markets are under pressure, but the generally positive view towards the Canadian economy may be enough to keep this slide from getting out of hand. Look for the Sept Canadian to find support near the 96.18 level during today’s session.
TODAY’S MARKET IDEAS: The Dollar will continue to gain ground, as long as sentiment for global markets remains weak. The September Yen will also benefit from risk aversion support, but look for the September Swiss to make a turnaround if risk concerns can be dampened over the next few hours.
Tags: Canadian, Dollar, Financials, Pound, Swiss, Yen
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