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EUR/USD Cracks Under Pressure; Downside Eyed |
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Written by Jason
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Thursday, 18 August 2005 |
The euro struggled mightily, being pushed to an intra-day low of 1.2157 against the U.S. dollar. The previously mentioned level of 1.2260 was defended throughout the Asian session and early into the European session; however, it soon collapsed and a sell-off ensued with aggressive short term traders leading the charge. Our target is now 1.2120 with a risk-reward limit of 1.2260. Despite the fact that the EUR/USD was trading at a two-week low this did not dissuade traders from selling it. Among other things, oil was still being mentioned as provoking a more aggressive Fed in the future even though the price of crude has been easing as of late. Further, rumours were circulating about repatriation flows and huge fund orders. Profit taking was seen around the 1.2160 level, but there was no significant bounce showing the waning strength of the bulls.
 ClockworkFX's Daily Forex Insight - August 18, 2005 (82.97 KB)
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Dollar Struggling Ahead of Trade Data |
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Written by Jason
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Thursday, 11 August 2005 |
The U.S. dollar continues to struggle as more attention is now put on the structural factors of the U.S. - mainly the twin budget deficits. The dollar depreciated to a low of 109.73 against the yen and 1.2452 against the euro in today’s American session trading. The trade report due tomorrow is forecasted at $57.2 billion deficit in June, up from $55.3 billion in the previous month. This projected expansion is the salient difference that induces traders, both long term and short, to dump the dollar. In addition, the recent announcement by the PBOC to create a basket of currencies for valuing its yuan has added to the bearish dollar bias as China would now need to exchange fewer dollars against its currency.
ClockworkFX's Daily Forex Insight - August 11, 2005 (86.50 KB)
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Yen Rallies; EUR/USD Range Bound |
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Written by Jason
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Wednesday, 10 August 2005 |
A new poll released shows confidence in Koizumi is higher despite the recent fallout of his proposed postal privatization bills. This overshadows any political uncertainty as to the end of Koizumi’s reign. The Nikkei continues strong as it advanced above 12,000 for the first time in 15 months. Furthermore, recent reports shows higher government forecasts for investment and consumer spending. All these positive elements have been yen supportive as of late and should continue to be. This sanguine environment is hopeful to spur more capital in the world’s second largest economy. The diamond formation has set USD/JPY up nicely for a drop; however it will have to contend with weekly uptrend support at 110.40. A break below this level will lessen the bullish tone on the pair and establish targets of 109.00 and lower.
ClockworkFX's Daily Forex Insight - August 10, 2005 (97.69 KB)
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EUR/USD Neutral Ahead of FOMC Decision |
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Written by Jason
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Tuesday, 09 August 2005 |
The EUR/USD remains neutral ahead of the FOMC decision today. It is widely expected that the Fed will raise rates another 25 basis points to 3.50%. Medium-term traders refuse to show their ambiguity with their recent Euro bullishness. According to a recent Deutsche Bank survey, optimism for the EUR/USD has reached its highest point since December 2001. Bluntly stated, these traders have taken a contradictory approach to the strength of the U.S. economy or have simply shifted focus back to the dollar-bearish twin U.S. deficit arguments.
 ClockworkFX's Daily Forex Insight - August 9, 2005 (90.06 KB)
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Yen Rallies Despite Koizumi Bill Defeat |
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Written by Jason
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Monday, 08 August 2005 |
The yen rallied to a high of 111.55 against the U.S. dollar today despite a 125 to 108 vote against the postal bill pushed by Prime Minister Koizumi. As a consequence, Koizumi dissolved the Japanese parliament and called for a general election to be held on September 11. Notwithstanding, the political uncertainty was brushed off by traders who instead focused on the positive economic environment in Japan. Major technical support is rooted at 110.75 with difficult resistance at 112.80.
ClockworkFX's Daily Forex Insight - August 8, 2005 (88.22 KB)
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