Tuesday March 30, 2010 - 19:01:55 GMT
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Consumer Confidence Data Turns Dollar Higher
The Dollar turned about
mid-morning after a lower opening. Today‚Äôs U.S. Consumer Confidence
Data came out better than expected, boosting the Greenback. Evidence is
beginning to build which shows the U.S. economy is recovering faster
than the Euro Zone. This means the Fed is likely to begin raising
interest rates before the European Central Bank. In addition, 10-Year
Note yields have risen above the German Bund which is making an
investment in U.S. Treasuries a more attractive investment. This is
helping to pressure the EUR USD at the mid-session.
The GBP USD
posted a strong gain this morning following an upward revision in
Fourth Quarter GDP. The final GDP figure showed the economy expanded by
0.4% during the fourth quarter, up from the previous estimate of 0.3%.
Economists claim upward revisions in services and construction were
responsible for the increase. Despite the bullish news, this market is
still in a down trend and struggling with a key 50% level at 1.5080.
momentum slowed considerably overnight which helped weaken the Euro
along with better than expected U.S. Consumer Confidence. The buzz over
the European Union/International Monetary Fund Greece bailout plan
seems to be fading also. As expected, the EUR USD broke back into a
minor 50% retracement level at 1.3402.
The lower Euro is
helping to underpin the USD CHF after breaking out above the .618
retracement level at 1.0628. The next upside target is another 50%
level at 1.0703. The trend will remain down until 1.0751 is violated.
USD JPY weakened initially overnight, but turned positive after global
equity markets rallied and U.S. Consumer Confidence came out better
than expected. Overbought conditions are still limiting movement in
this currency pair along with a slow down in upside momentum in U.S.
Speculators drove the USD CAD lower on
expectations of a strong U.S. jobs report on Friday. Many traders feel
that strong jobs data will also help the Canadian economy and bring the
Bank of Canada closer to raising interest rates before the Fed. Sellers
pressed this pair into a .618 support level near 1.0152. Shorts covered
their positions following a test of this level and when it was reported
that U.S. Consumer Confidence was better than expected.
USD continued its surge to the upside, buoyed by bullish comments from
over the week-end by Reserve Bank of Australia Governor Stevens. The
central bank leader said that improvements in the Australian housing
market may warrant another interest rate hike in April. In addition,
speculators are anticipating a bullish Retail Sales Report on
Wednesday. Now that this market has crossed to the bull side of a
retracement zone, look for a test of the last main top at .9251. A slow
down in the U.S. stock market rally led to some position evening in the
Aussie which is causing it to back off the high.
for higher risk helped to drive the NZD USD into a key 50% retracement
level at .7124. Sellers came in after this price was tested and U.S.
equity markets weakened. A breakout over this level could trigger at
test of the .618 level at .7199. A rally in U.S. equity markets today
is likely to trigger a surge to the upside.
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