Wednesday December 30, 2009 - 20:23:28 GMT
Share This Story
Forex Hound - www.forexhound.com
Profit-Takers Hit Dollar after Chicago PMI Surge
The U.S. opened higher
after global equity markets weakened after a drop in demand for higher
risk assets. The Dollar surged to its high for the day against most
major currencies following the release of a better than expected
Chicago PMI report. This report was another sign that the U.S. economy
was recovering from the recession. After the early morning rush to a
new high, buying fizzled as traders began to take year-end profits. At
this time, the Dollar is still higher, but downside momentum is
building which could take it lower by the close.
The USD JPY
surged to the upside, taking out the late October high at 92.32, on its
way to a three-month high. Concern over a potential bankruptcy filing
by Japan Airlines is putting pressure on the Yen. Stories are also
circulating that Japanâ€™s AA rating is in danger of being cut if the
country does not shore up its debt situation. Finally, traders are also
factoring in potential action by the Fed in 2010 that will lead to
higher interest rates and a stronger Dollar. Pre-holiday profit-taking
is triggering an intra-day correction at this time.
in Euro Zone money supply pressured the EUR USD early in the trading
session. This news was unexpected but could cause issues in the
short-run as it could lead to a credit crunch. This is important to
note because of credit problems in Greece, Spain and Portugal. So far
the European Central Bank has not offered any aid to these regions.
Tightening credit conditions could mean that the ECB may not be in a
position to offer relief to these troubled regions if problems
accelerate. At the mid-session, the Euro is mounting a strong comeback
as profit-takers stepped in ahead of the New Yearâ€™s holiday.
GBP USD started out under pressure this morning following yesterdayâ€™s
reversal to the downside, but turned around shortly after the opening
to move higher for the day. Investors are worried that the economy will
remain weak over the near-term while the U.K. wrestles with a huge debt
burden. The lack of any major news event points toward technical
factors as the main reason for the turnaround. Relative Strength and
the Stochastics Oscillator indicate this market may have reached
The USD CHF confirmed yesterdayâ€™s closing price
reversal bottom at 1.0278 when it took out 1.0384. The chart pattern
suggested the next upside objective was 1.0392 to 1.0419. Intraday
activity took this market into the retracement zone where traders took
profits. This helped the USD CHF turn negative for the day.
equity markets and lower gold helped to support the USD CAD early in
the trading session, sending this currency pair into a key retracement
zone at 1.0555 to 1.0600. Profit-takers decided to take action in this
zone, triggering a slight sell-off at the mid-session. Look for the
Canadian Dollar to rally if gold strengthens and equities weaken.
global equity markets are pressured the AUD USD early in the trading
session. End-of-the-year profit-taking triggered a sell-off in the
stock indices which is led to reduced demand for higher yielding
assets. Yesterday the Aussie stopped near a key 50% price at .8964.
This price remains resistance today along with the .618 retracement
price at .9018. A quick surge to the upside in U.S. equities, following
the better than expected Chicago PMI Report, helped the Aussie bottom
intraday. The weakening Dollar is helping the Australian Dollar turn
positive at the mid-session.
The NZD USD is mounting a strong
turnaround after trading weaker earlier in the session. This currency
pair is exhibiting great strength now that it has overcome a resistance
zone at .7144 to .7185. Buyers are also trying to push this market
through a key downtrending Gann angle at .7215.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."