9 December Forex daily review
On Monday, the highest activity was observed on the cross rates with the Japanese yen. The market opened crosses gapped up and after a minor correction of the U.S. session, the growth continued (weakening of the yen). The growth of cross-rates supported the euro/dollar and pound/dollar.
The EURUSD climbed to 1.3745. GBPUSD rose to 1.6430 mark. If we compare the dynamics of movement between the major pairs, so the British pound showed the largest amplitude oscillations with the dollar and the yen. British pound has strengthened its position in relation to the dollar, the euro and the yen after the speech by Bank of England Governor Mark Carney.
Traders sell the U.S. dollar, ignoring strong economic data from the U.S. and weaknesses of the Eurozone. Germany yesterday released the data on the trade balance and industrial production. Both figures were worse than expected: trade surplus narrowed to 16.8 billion euros against 18.8 billion euros, index of industrial production for November went into negative zone. Instead of the growth by 0.8%, industrial production in Germany fell by 1.2%.
Also, exchange rates had almost no reaction to the statements of the Fed. James Bullard and Richard Fisher in their speeches made it clear that they do not exclude the possibility of starting to minimize QE3 program at the upcoming FOMC meeting on December 17-18. Fisher believes that the Fed should establish and publicize a schedule of reducing the purchase of assets, market participants no longer guessing the timing of folding QE3.
For us, the market situation remains uncertain, so we consider Tuesday the main scenarios of the trend against the dollar and continue to watch the show from the side.
On Monday, the single currency went up without a rollback and rushed to 1.3850. Euro strengthens against fundamental factors, but technically objective is fulfilled on the monthly chart. EURUSD rate moves to the upper boundary of the triangle, which has its origins in July 2008. Bulls redeem all kickbacks. Here or in fact, European banks are buying euros preparing for stress tests or preparing the ground for the global growth of the dollar. In the euro/dollar some large banks are beginning to consider the sale of the euro from the zone 1.3770-1.3800 with a stop above 1.3850.
On payrolls from minimum of 1.3620 the single currency has strengthened by 90 points. Yesterday it came to 1.3735 mark. Today – to 1.3765. This level is a serious and rollback can begin at any time. Since the bulls ignore fundamentals, we would venture to consider the growth of the euro to 1.3795, while it himself remained an observer. If on Monday we do not work always, but now refuse to sell because of the uncertain situation.
On Monday, with a maximum rate of 0.9130, AUDUSD fell to 0.9080 and it is now trying to develop a new upward momentum. At 8.52 GMT AUDUSD was trading at 0.9105. The market is set to dollar sales, so the basic scenario for growth 0.9150.
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