Wednesday April 7, 2010 - 17:57:57 GMT
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Euro Rebounds off Low on Possible Central Bank Buying
The EUR USD is trading
weaker at the mid-session on renewed concerns that Greece will default
on its debt. Earlier today the spread between Greek Bonds and German
Bunds moved to a historically wide level signaling that investors feel
that Greece may not be able to finance its surging debt burden.
Conditions are expected to worsen as austere financial measures imposed
by Greece to shore up its economy begin to take hold. Losses have been
limited by rumors of central bank buying.
The GBP USD has
recovered from earlier selling pressure, triggered by a weaker than
expected U.K. services industry reports. Despite the strong intraday
comeback, gains have been limited by the key 50% technical level at
1.5297. Look for downside pressure as long as this price holds as
Lower equity prices are helping to pressure the USD
JPY. Technically, this market has been under pressure since Mondayâ€™s
closing price reversal top. The chart pattern suggests a minimum 2 to 3
day break with a possibility of a near-term decline to a 50% level at
The USD CHF is trading higher because of the weaker
Euro. Traders expect more intervention by the Swiss National Bank.
Technically this pair is in a position to change the trend to up on a
breakout over the last swing top at 1.0751.
Talk of a large U.S.
investment bank buy is helping to boost the USD CAD after this pair
tested the waters below parity earlier in the session. Oversold
conditions and a possible closing price reversal bottom may encourage
short-covering over the near-term. The strong surge in gold appears to
have been neutralized by the weakness in crude oil, thereby having
little effect on the Canadian Dollar today.
Higher gold prices
and an early recovery in U.S. equity markets helped drive up the AUD
USD. The trend is this market is decisively higher, leading to
speculation that this rally will not stop until the high for the year
at .9329 is tested over the near-term.
The NZD USD is trading
better following a slight follow-through to the upside following
yesterdayâ€™s minor reversal bottom. Higher gold prices are helping to
underpin this market. Technically, this market turned the main trend
down on the daily chart on Tuesday. The current rally could be
short-covering, but some traders feel that the possibility of an
interest rate hike in June is lending some support.
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