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UK Britons Pay Off Housing Equity, SWZ Leading Index Falls to 5-1/2 Year Low It was a quite day for the fundamental calendar. In the UK, Britons paid off existing mortgages at a faster rate then they took out new ones in the third quarter. Households repaid a net 5.69 billion pounds. In Switzerland, the KOF leading economic index fell to negative 0.39, lower than forecasts, and the lowest the index has been in 5 and a half years. EUR/USD - Volatility Increases, Euro Climbs But Retreats From Resistance
Coming out of the weekend, we saw an increase in volatility in the Euro-Dollar pair compared to the thin trading we saw last week. The Euro rose during the NY open to test 1.4310, which was horizontal resistance from December 19th. The Dollar was pressured as fighting broke out in Israel which spread concerns that middle east oil supplies will be disrupted. During the rest of the NY session however, the Euro pared its earlier gains, falling more than 200 pips from its intra-day high. EUR/CHF - Swiss Franc Gains on Political Instability
The fighting in the Middle East helped boost the value of the Swiss Franc as it is a main destination for save-haven flows during times of political instability. The Euro-Franc pair slid 250 pips in the Franc's favor, extending the recent two-week downtrend in this pair to almost 1100 pips. The Franc has taken the mantle as the main destination for investors concerned about increased risk in global markets as well, which has fueled its recent gains. GBP/USD - Pound Falls To Bottom Of Two Month Range
The Pound-Dollar pair fell 200 pips today, breaking below 1.47, and extending a down move that started around 1.57. Taking a look at the last two months we see that we are at the bottoms of a sideways channel with support from the middle of December a 6 year low. The Pound remains pressured by its weak economy and expectations that the Bank of England will have to continue with its bold interest rate cuts. EUR/GBP - Euro Climbs to New Record High vs Pound
The Euro-Pound meanwhile surged to new record high a few pips below the 0.98 level. That continues the rise in the Euro towards parity we have been seeing since the beginning of December. Today's action shows the pair breaking out of a upward sloping triangle formation. In the beginning of December the pair was at 0.825, a difference of 1500 pips compared to today's price. In NY trading the Euro gave up some of its gains, as we saw in the Euro-Dollar pair. USD/JPY - Yen Gains on Fall in US Stocks
Turning to the US, stocks were down as rising crude-oil pressured consumer-related stocks and the end of the year brought some selling of the worst performers of the year. The weakness in equities hurt the Dollar against the Yen. The uptrend in the Dollar-Yen pair that lasted several sessions in the beginning of last week stalled and reversed with the pair breaking below short term support at 90.30. USD/CAD - Loonie and Greenback Trading in Wedge Pattern
In our final pair today, the price action in the US Dollar-Canadian Dollar pair continues to play out in a wedge formation. The pair rose to test 1.2230 but fell back down in later NY trading to 1.21. The Loonie was benefitting from a rise in oil and gold prices and traders should look for a break of the wedge to see where the pair will go next. Overnight's and Tomorrow's Releases Taking a look at upcoming releases, the UK will post its nationwide housing prices, the Euro-zone releases data on private loans and money supply, and Switzerland will reveal its UBS consumption indicator. Also, Germany posts its preliminary consumer prices data. Tomorrow, the US has 3 releases, the S&P Case Shiller measure of housing prices, the Chicago PMI, and the Conference Board measure of consumer confidence. |
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*Trading OTC Forex on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange and futures trading, and seek advice from an independent financial advisor if you have any doubts. |
