The low volatility in the US stock markets continued yesterday and will probably remain narrow until the FOMC rate statement on the second part of today's trading session. The interest level is expected to be unchanged, but the investors will hope to find out about new plans for creating new jobs.
The interest rate in New Zealand is published today as well.
EUR/USD
Greece is close to get the final agreement on the haircut of the private sector's debts, and with the positive atmosphere in the stock markets in both US & Europe, the Euro is continuing its recovering that started last week, when the pair broke-out the downtrend channel. The "short-squeeze" is strong as we estimated and the Euro easily crossed the first target at 1.30 on its way to 1.31. A break-up of this resistance, which might occur during the interest announcement, can lift the price up to 1.33-1.335 in the next few days. On the other hand, indicators show that the pair is overbought and therefore a bearish reversal might occur around 1.305-1.31.
USD/JPY
The USD made a strong break-out against the Japanese Yen yesterday and almost reached the target we set for this potential break-up, at 78.0. We analyzed the pair several time during the recent weeks and we mentioned the level of 77.0 as an important level that if the USD breaks it, many automatic orders will be triggered. This estimation turned to be a fact and the pair acted according to the analysis. However, it is important to understand that in all of the recent analysis we mentioned the level of 76.5 as a possible break-down level. This is important to clarify because the technical trader should not analyze one direction only, but he must be prepared for both scenarios.
CAD/JPY
The CAD broke the triangle pattern it had on the daily chart with the USD, but the correction of the USD yesterday pulled the price back to the triangle's zone, so the break-down cannot be declared as successful yet. However, the weakening of the Yen against the USD reflects in most of the other major currencies, including the CAD. The pair is now facing the resistance at 77.0, in which it failed to break several time in the past five months. Therefore, there is a good probability that it will fail again, but if it does manage to break-out, the pair might reach the 200 SMA at 79.0.
Risk Disclosure
Trading and the execution of transactions in currencies, commodities,CFD indexes and other financial products with or without using high financial leverage, is speculative trading of high risk and may cause substantial gain or loss proportional to the size of the collateral, up to the total loss of the collateral sum in a very short period. The fluctuation of the prices and rates in the currency markets, commodities, CFD ,indexes and other financial derivatives are often volatile and there is no accurate forecasting as per the size of the change, its direction and the time frame in which it occurs.You must consider carefully and seriously if this type of financial activity fits your needs, your financial resources and personal circumstances. Since the risk of losing some of the invested funds or all the funds in a relative short period is high; it is recommended that you use for that purpose funds which you designated for speculative financial transactions of high risk.
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