Monday July 11, 2005 - 04:35:49 GMT
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Tricom Futures and Foreign Exchange -
Forex: Tread Warily this week - There's a wounded Sterling out there
Well, the US payrolls proved a little disappointing on the face of it, however when you look at the upward revision for the previous couple of months, we can conclude that the US economy is going along at a comfortable rate, with little signs of any "soft-patch".
So far today, we've seen the USD come off a little more, I think this is more a case of the market looking to take profits in their long USD positions, rather than a belief that the recent EUR and GBP weakness has ended. In the EUR, the 1.2000 level will continue to prove hard to break above, while the GBP will need to break back above 1.7520 to suggest the recent bearish tone is near an end. I think at these low levels in EUR and GBP we need to trade with smaller size, and be wary that a sudden turn around could happen at anytime. I'm not saying that the down move is over, but we may get a 100-200 point rally before the next leg down.
The USD slipped after key US jobs figures came in below analysts' expectations. Although the report came as something of a disappointment to dollar bulls, it is not likely to make a serious dent in the current positive sentiment towards the US currency
U.S. stocks rose sharply on Friday on modest U.S. job creation and a drop in oil prices, while sterling slid to a 19-month low against the dollar for a second day, extending losses after Thursday's deadly bomb attacks in London.
U.S. Treasury prices declined as a rallying stock market attracted funds away from government debt.
Today’s Economic Releases:
UK: Trade Balance
Today’s Top Trades
· Sell EUR/USD strength towards 1.2010-20
. Buy USD/JPY around 111.60-50
For more ideas send me an email, [email protected]
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