Thursday May 6, 2010 - 21:48:07 GMT
Share This Story
Forex Hound - www.forexhound.com
Australian Dollar Plunges as Investors Shed Risky Assets
The AUD USD plunged this morning through an old swing bottom
at .9001 and a major 50% price level at .8983.
The Aussie broke as traders liquidated positions in higher yielding
currencies and risky assets.
Technically, the Aussie is testing uptrending Gann angle
support at .8897 and a major Fibonacci retracement level at .8886. A break
through this support cluster will likely trigger an acceleration to the
downside. Regaining the 50% level will be a sign of a developing short-covering
The NZD USD is trading sharply lower in an expanded range.
Traders are dumping higher yielding assets in favor of safety. This morning a
minor retracement level at .7188 to .7156 failed, setting up further decline to
a major uptrending Gann angle at .7126. This angle has held several times in
the past few weeks. A failure to hold this time down sets up a further decline
to last swing bottom at .7052. A break through this level will turn the main
trend to down on the daily chart.
Weaker equities and crude oil are helping to fuel an upside
breakout in the USD CAD. This morning the Dollar/CAD broke through a 50%
retracement level at 1.0366. This triggered a further rally to the Fibonacci
retracement level at 1.0463. Watch for a possible technical bounce at this
level. It is likely to be short-term however, as upside momentum indicates
further upside action is possible.
In an unusual move today, the USD CHF is trading lower
despite the weaker Euro. For months a weaker Euro meant a weaker Swiss Franc. Traders had been selling the Swiss Franc in
anticipation of further intervention by the Swiss National Bank. Today, it has
been rumored that the SNB had reached its objective and is no longer going to
flood the market with Francs. This is the catalyst behind today‚Äôs weakness in
The GBP USD is plunging at the mid-session. Downside
momentum is strong enough, making the late March bottom at 1.4797 the next
likely price target. Traders are reacting to the on-going election and
speculation that a hung parliament may result. Furthermore, Sterling investors
realize that this election means that the U.K. government is getting closer
to proposing austere financial measures in an effort to tighten up the huge
budget in order to avoid a slash in its debt rating.
The huge drop in the stock market is triggering a flight to
safety rally in the Japanese Yen. The USD JPY is down sharply after the trend
changed to down on Wednesday. Investors are dumping U.S.
equities and repatriating their funds to Japan to pay off loans made in Yen.
Downside momentum is building which means the mid-April bottom at 91.59 is the
This morning the Greek government passed its new cost
cutting measures, making Greece
eligible for the bailout money offered by the European Central Bank and the
International Monetary Fund. The Euro continued to weaken however, as bearish
traders are no focusing their attention on similar fiscal problems developing
in Spain and Portugal.
This morning the ECB voted to leave interest rates unchanged
at 1.0%. It also added that rates would remain low with financial uncertainty still
expected to be a draw on the Euro Zone economy. ECB President Jean Claude
Trichet offered no solid relief to investors in his post-meeting press conference.
Many traders had expected him to make a much stronger statement regarding the
Euro Zone problems but his talk failed to instill any confidence in investors. In
fact, the Euro continued to break sharply after his press conference.
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."