Tuesday September 15, 2009 - 13:28:00 GMT
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Forex Hound - www.forexhound.com
GBP USD Weakens on Economic Outlook
Technical and fundamental factors continue to pressure the GBP USD. Technically, last weekâ€™s rally now appears to have been a short-covering rally in a downtrend. Furthermore, this currency pair ran into resistance at a key retracement level.
Fundamentally, investors still feel the U.K. economy is lagging behind the global economic recovery. Although home prices may be showing some improvements, traders still feel that credit issues may curtail a recovery in the real estate sector.
The EUR USD is trading mixed to lower. German Confidence was reported higher in September but the trading level of the Euro may be a little pricey for investors. Last weekâ€™s rally may have been overdone to the upside.
The prospect of lower energy prices is helping to put pressure on the Canadian Dollar. With crude oil reflecting a large portion of the Canadian economy, traders feel that it may be too soon to get aggressively long the Canadian Dollar until the global economy starts to increase demand for energy. Traders seem to be content with leaving the USD CAD inside of a trading range.
Oversold conditions are helping to boost the USD JPY after several weeks of selling pressure. The Dollar is likely to gain over the short-term until prices get back to more reasonable levels. As long as U.S. interest rates continue to remain low, the Japanese Yen should gain over the Dollar.
Despite higher equity markets, the NZD USD and AUD USD are attracting selling pressure this morning. Once again last weekâ€™s rally could have been too much, too soon, making trader reluctant to buy these currencies at current levels. Demand for higher risk assets is still there, but maybe not at current price levels.
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