Friday July 29, 2005 - 02:19:22 GMT
Share This Story
Tricom Futures and Foreign Exchange -
Forex: We're at the Crossroads today - Can the EUR break the downtrend??
Gold bullion moved to its highest in two weeks on Thursday afternoon in Europe due to a weaker dollar, as investors hesitated in adding to positions ahead of Friday's U.S. economic growth data. The euro was drawing some strength from modest enthusiasm for recent European economic data while also benefiting from dollar investors sitting on the sidelines ahead of the U.S. gross domestic product report scheduled for Friday.
Looks like a big day/night ahead in the financial markets - we have US GDP, followed by Michigan Consumer Sentiment, and then Chicago PMI to round it off. The most likely scenario will be a mixed bag of signals, which will result in a choppy trading session.
So far this morning trading has been largely uneventful with slight USD softness, probably largely attributed to the last of the longs getting out ahead of today's data. The EUR/USD is close to a down trendline which comes in at 1.2160 today, a break above 1.2160-80 it will signal an end to the recent downtrend. Similarly in the USD/CHF, the uptrendline dates back to April and shows support around 1.2845. A break below 1.2830-20 will suggest the recent USD strength has come to an end. I think the trendlines will hold, and the USD will resume its uptrend, while the EUR will continue to break down, targeting 1.1800 in coming weeks.
In a GoldmanSachs report out today, they say: "Homeland Investment Act (HIA) flows likely to be important USD support in coming months. US firms could repatriate more than $300 billion, of which about 30% likely to generate FX flows; says repatriation only began in earnest in mid-May and deadline for majority of transactions is end-2005; adds most of flows likely vs European crosses, resulting in selling of EUR/USD in particular; viewed in isolation, HIA flows sufficient to cause fall of roughly 5 big figures in EUR/USD." Obviously, view this report with the thought that Goldman's maybe talking their book.
Today’s Economic Releases:
US: GDP (Q2)
US: Michigan Consumer Sentiment
US: Chicago PMI
Today’s Top Trades
· Buy AUD/NZD around 1.1100-10
· Sell EUR/USD around 1.2140-50, stops above 1.2180
· Buy USD/CHF around 1.2845, with stops under 1.2800
For more ideas send me an email, [email protected]
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."