Friday March 5, 2010 - 20:23:01 GMT
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Forex Hound - www.forexhound.com
Dollar Trading Lower against Most Majors
The U.S. Dollar is
trading lower against most major currencies after better-than-expected
jobs data drove investors into higher yielding assets. The initial move
in the Dollar was up after the U.S. Non-Farm Payrolls Report showed
fewer jobs were lost than estimated. Traders bought the Dollar on the
belief that the better jobs number would move the Fed closer to hiking
interest rates. Higher interest rates would make U.S. investments
relatively more attractive. This move was short-lived however as
investor demand for higher yielding assets overcame the desire to hold
The EUR USD is trading better at the mid-session.
Relief that the Greek budget deficit crisis may be easing is helping to
drive out weaker shorts. Earlier in the week, the main trend turned up
on the daily chart, but this market needs to move through 1.3735 in
order to reaffirm this change in trend.
The British Pound is
trading near the high of the day at the mid-session. Upside momentum
seems to be building which could take this market to a 50% level at
1.5297 over the near-term. The current rally appears to be driven by
short-covering and bottom-picking following a sharp sell-off earlier in
the week. The driving forces behind the recent sell-off have been the
weak economy, soft monetary policy and political uncertainty.
USD JPY is trading sharply higher. The improving U.S. economy and
demand for higher risk assets is putting pressure on the Japanese Yen
as it resumes its role as a funding currency. Traders are also reacting
to the possibility that the Bank of Japan will announce more stimuli at
its upcoming policy meeting. Todayâ€™s rally completed the first
objective of yesterdayâ€™s closing price reversal bottom when it reached
a .618 price level at 90.61.
The strengthening Euro is helping to
pressure the USD CHF. Traders are expressing relief that a higher Euro
will encourage the Swiss National Bank from any further interventions.
The main downside objective remains a major 50% level at 1.0513.
for higher risk assets is giving the AUD USD and NZD USD a boost at the
mid-session. The Aussie is one of the strongest currencies. Todayâ€™s
trading action proved this by taking out the .618 resistance level at
.9042. This price is now new support. Watch for a possible late session
acceleration to the upside if stops are hit above the recent main top
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