The U.S. Dollar is trading lower against
all major currencies in reaction to this morningâ€™s disappointing U.S. ADP
employment report. Traders were banking on a figure of +20,000 but were handed
With the number on the wrong side of the
zero, traders sold off the Greenback in anticipation of a weak U.S. Non-Farm
Payrolls number on Friday. The disappointing, but not surprising number also
solidified trader conviction that the Fed will add additional liquidity to the
market in order to stimulate the economy.
No one expected a â€śbigâ€ť number since the
economy only grew at 1.6% according to the latest GDP report, but todayâ€™s
report showed that employers arenâ€™t necessarily firing, but they certainly arenâ€™t
hiring. This morningâ€™s report could be a sign that employment is beginning a
The Euro broke out to the upside through
the Fibonacci target at 1.3896. Letâ€™s see if it can sustain the rally by
establishing support above this level. A close back under the .618 line could
be the start of a short-term profit-taking break ahead of tomorrowâ€™s European
Central Bank policy meeting.
The rally in the British Pound helped
establish a new higher bottom at 1.5669. The rally, however, appears to be
slowing in front of the August top at 1.5997. Trading is light today because of
Thursdayâ€™s central bank meeting. Investors are looking for the Bank of England
to talk about additional quantitative easing through its asset buyback program.
The USD CHF is down this morning as the
U.S. Dollar continues to lose its glitter as the global reserve currency. The
main trend is down. A new main top was formed at .9843. A move through this
price will turn the main trend to up.
The USD JPY broke the â€śintervention
bottomâ€ť. Traders are approaching the market with caution at current levels in
anticipation of another round of intervention by the Bank of Japan. So far
there has been no sign of central bank activity. The last intervention took place during the
Japanese trading session.
The USD CAD dropped sharply early in the
session but is now trading off its low. The weaker equity market as well as the
intraday break in crude oil off its high is giving long traders an excuse to
take profits. The weaker Dollar, stronger Euro is expected to help limit the
The Australian Dollar took out yesterdayâ€™s
high while slowing working its way toward the July 2008 top at .9849. The break in the U.S. equity markets has had a
limited effect on the Aussie. Itâ€™s going to take a hard break in the stock
market to trigger a profit-taking break. The weak U.S. economy is the main catalyst
behind the Aussie Dollarâ€™s strength.