Thursday April 15, 2010 - 20:19:11 GMT
Share This Story
Forex Hound - www.forexhound.com
British Pound gains as Election Concerns Ease
The GBP USD is trading better at the mid-session after a
report showed the opposition Conservative Partyâ€™s lead over the Labor Party
widened, easing concerns that the May 6th election will produce a hung parliament.
Traders had been pressuring the British Pound lately because of concerns that a
hung parliament would result in a government too weak to tackle the U.K.â€™s huge
budget deficit. Gains could be limited on speculation that bullish traders will
begin to liquidate their long positions ahead of the election.
Technically, this currency found support following an early
test of an uptrending Gann angle support at 1.5397. Look for this market to
remain firm unless it closes lower. In that case a reversal top will form
indicating the start of a potential short-term correction.
The EUR USD is down but off its low. Following a sharply
lower opening, the Euro is mounting a small comeback as reports surfaced that
the International Monetary Fund will meet with Greece on Monday to discuss
financial aid options.
Market participants are feeling jittery again because of
concerns over Greece.
Investors are worried that the IMF/EU $61 billion financial aid plan will not
be enough to help the Greek economy and restore confidence in the Euro. At this
time, the Euro is facing serious credibility issues.
Last night China
reported that its Gross Domestic Product grew 11.9 percent from a year ago.
This was slightly better than the median guesses of 11.7 percent. The news, that Chinaâ€™s economy accelerated more
than expected in the first quarter, raised concerns that it may be overheating,
prompting more talk of a possible interest rate like. Traders are also
increasing speculation that China
may revalue its currency as soon as next week. If this takes place, look for
the Japanese Yen to strengthen and the U.S. Dollar to weaken.
economic reports this morning helped weaken the Dollar after Weekly Initial Job
Claims and Industrial Production were less than stellar. The job claims report
showed more Americans filed for unemployment aid while factory production came
in below expectations. Both reports signaled interest rates would remain low.
News that Chinaâ€™s
GDP was up slightly more than expected during the first quarter is helping to
pressure the USD JPY at the mid-session. Technically, the charts indicate that
downside momentum could take this market down to 92.26 over the near-term.
Traders should also note that the general consensus suggests that the Japanese
Yen is likely to gain when China
decides to revalue its currency.
Short-covering ahead of next weekâ€™s Bank of Canada meeting
on April 20th may be helping to underpin the USD CAD at the mid-session. The
chart formation suggests the possibility of a short covering rally. Oversold
conditions are also helping this market recover after touching a new low for
the week on Wednesday.
For over a year, Bank of Canada Governor Mark Carney has
pledged to keep interest rates at a record low of 0.25% through June. Canadian
financial markets are indicating, however, that rates may rise as early as June
1. This helped pressure the USD CAD below parity recently. The bigger picture suggests the Canadian
Dollar is likely to continue to rise because of the stronger-than-expected
economic recovery and expectations for interest rate increases.
The AUD USD rose overnight following Chinaâ€™s strong
GDP report. Weaker demand for higher yielding assets, however, quickly brought
in sellers. The recent two day rally may be setting up the market for a break.
This is possible due to the closing price reversal top at .9387 which is still
weighing on the markets. A trade through .9223 will turn the main trend down.
The NZD USD is feeling similar pressure but this market
continues to remain glued to a major 50% price level at .7124. The charts
indicate that downside pressure is likely as long as the Kiwi remains below
.7200. A break through .7086 will turn the main trend down. Traders may begin
to sell off both the New Zealand
and Australian Dollars ahead of next weekâ€™s possible revaluing of the Yuan by China.
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."