Forex Daily Analysis 2012-03-16

Improving economic data supported the US stock markets that closed another green trading-day yesterday. Continuing jobless claims were 351K, lower than analysts' consensus of 354K claims. Philly manufacturing index, which indicates the activity of the manufacturing sector, was higher than expectations as well. Today are published the core CPI M/M & consumer sentiment.
AUD/USD
The Australian dollar reached the target we set for the break-down of the support at 1.06, which was the 200 SMA, around 1.04. As we estimated, the break-down of this level caused significant declines and the support appeared around the 200 SMA, which is an indicator that many investors use. The support occurred close to the 50% Fibonacci level, which means that a bullish reversal might start from this point. Stochastic oscillator levels are showing oversold situation, and this supports the possibility for a bullish reversal by the Aussie that might retest the break-down level at 1.06.

AUD/CAD
Most of the major currencies got stronger against the USD yesterday, but the CAD did not make a significant change against the American dollar. The pair USD/CAD is consolidating around 0.99 and it is not clear whether the bears or the bulls have the upper hand now.
The fact that the CAD is stamping versus the USD, helps the AUD to rise against it, after few weeks of heavy sales in the pair AUD/CAD. The pair blocked by the 200 SMA and if this support lasts, the AUD might correct up to 1.055-1.06 and even higher.

EUR/GBP
Both EUR & GBP are traded around strong supports against the USD. The EUR gets support at 1.30, might continue to 1.315-1.32, whereas the GBP has support at 1.565, and might rise to 1.58.
The pair has been moving through a narrow channel and we analyze it each time the pair touches one of the channel's boundaries. Two weeks ago, when the pair traded a little bit higher that 0.83, we brought up the trade idea of trying to take it up to 0.84 and the trade worked exactly as we planned. The pair is close to 0.83 again and if the current pattern remains, the pair will rise towards 0.84. However, a powerful movement of the GBP might cause a break-down of the support and take it down to 0.82.

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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