Tuesday March 2, 2010 - 19:00:16 GMT
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Dollar Mixed; Euro May Post Reversal Bottom
The U.S. Dollar is
trading mixed against most majors as traders try to decide whether it
has reached the end of the rally, This morningâ€™s surge to the upside in
the March Dollar Index fell short of the recent main top at 81.43
before turning lower. This is an indication that the selling may be
greater than the buying at current levels. The formation of a secondary
lower top will also be a strong sign that this market is getting ready
to rollover to the downside.
After touching a new low for the
year overnight, the EUR USD turned around as the lack of fresh selling
pressure scared some of the weaker shorts out of the market. At the
midsession, the Euro is trading higher which puts it in a position to
form a closing price reversal bottom. Bullish traders are banking on a
resolution of the Greek fiscal crisis to trigger a huge short-covering
The GBP USD is trading lower but inside of Mondayâ€™s
range. The trend is still down and the fundamentals bearish, but
traders have stopped the downside pressure as they reassess the
developing political situation in the U.K. A recent poll shows that the
Minority may gain control of the Parliament for the first time since
1974. Investors fear that political gridlock will prevent the country
from digging out of its mountains of debt.
Despite a stronger
stock market today, the USD JPY remains under pressure but in a tight
three-day range. This could be position squaring ahead of Fridayâ€™s U.S.
Non-Farm Payrolls report or it could mean that investors are
anticipating a turnaround to the downside in the equity markets. The
charts indicate resistance is building around at major 50% level at
89.30. A further weakening will trigger a test of the .618 level at
The USD CHF is under pressure because of the strengthening
Euro. Investors have been buying the Swiss Franc as they have become
more relaxed about the possibility of another round of intervention by
the Swiss National Bank.
This morningâ€™s interest rate hike by the
Reserve Bank of Australia is helping to support the AUD USD at the
mid-session. Currently this market is testing a .618 level at .9042,
putting it in a position to breakout to the upside through the recent
swing top at .9070. Stops are likely to be hidden above this level
which could trigger an acceleration to the upside.
hike in interest rates is helping to pressure the NZD USD. In addition,
traders seem to be concerned about economic growth and employment.
Despite higher stocks, gold and crude oil, investors are not interested
in the long side of the New Zealand Dollar today.
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