The British pound tumbled to below $1.50 on Tuesday on weak economic data and as credit ratings firms warned on Britain's sovereign rating and those of its commercial banks. Political uncertainty about a hung parliament as the latest opinion polls showed a close race in key marginal seats also hurt the pound, as well as a general pullback in riskier assets. The pound was also hit after Fitch Ratings said Britain's sovereign credit profile had deteriorated, and urgency for fiscal adjustment was greatest for the UK, Spain and France among the larger AAA sovereigns. But it also said Britain was still within tolerance of its top-notch rating. "Sterling has been hit by comments by Fitch; the trade data showing weaker exports; and the earlier data on the housing market," said Hans Redeker, global head of fx strategy at BNP Paribas. "Ultimately, the move on sterling is to the downside." The GBP/USD is currently trading at $1.4990 as of 20:21pm, GMT, with a bullish trend.

The euro dropped versus the yen after Fitch Ratings Director Christopher Pryce said at a conference in London that while the outlook for Greece is “probably OK” in the short term, prospects in the next six to nine months are less certain. There are “clearly already the beginnings of dissent within the Greek cabinet,” Pryce said. The euro erased its loss versus the yen after the European Commission said in a draft report Greece is on course to meet its budget goals in 2010. The report will be discussed by EU finance ministers at a regular meeting in Brussels next week. “Over the past few days there was optimism that the austerity packages announced would lead to underlying improvement,” said Todd Elmer, global market currency strategist at Citigroup Inc. in New York. “‘Concerns over solvency in euro area will linger, and that will weigh on the euro.” The EUR/USD is currently trading at $1.3600 as of 20:43pm, GMT, with a bearish trend.

Canada’s dollar traded near its strongest level in over seven weeks as gains in stocks and persistent strength in commodity prices drove investors into currencies tied to economic growth. “Oil prices are not far off from cycle highs,” said David Watt, senior currency strategist in Toronto at Royal Bank of Canada, the nation’s biggest lender. “Ditto for the S&P 500. There is thus a clear triangulation that puts commodity currencies in a positive light, the Canadian dollar included.” Crude oil earlier declined as much as 2.1 percent to $80.16 a barrel before trading at $81.40. The Standard & Poor’s 500 Index advanced 0.3 percent. The USD/CAD is currently trading at 1.0262 as of 21:13pm, GMT, with a bullish trend.

The British pound fell against the dollar on Monday as appetite for risk waned and overall sentiment towards the pound remained uncertain. The greenback had come under broad selling pressure after above forecast U.S. payrolls data Friday prompted demand for riskier assets. The prospect of a hung UK parliament after an expected general election in May has been weighing on sterling in recent weeks, as opinion polls showed the opposition Conservative party's lead narrowing. A hung parliament is seen struggling to deal effectively with Britain's ballooning fiscal deficit. Latest polls from the weekend showed a slight reversal in the Conservatives' favor, but analysts said it would likely still be a closely fought election. "The outlook for the UK economy is still very challenging indeed. There's still a chance the BoE will restart their asset purchases, which would be sterling negative" said RBS currency strategist Paul Robson. The GBP/USD is currently trading at $1.5070 as of 20:10pm, GMT, with a bullish trend.

The greenback has room for “substantial” gains against the yen this year, according to Royal Bank of Scotland Group Plc. “A Japanese government effort that appears aimed at averting yen strength will encourage retail-capital outflow from Japan,” Greg Gibbs, a currency strategist in Sydney, wrote today in an investor note. “A robust recovery in the U.S. will encourage thoughts of rate hikes in the U.S. later this year, and encourage global investors to use other currencies, such as the yen, to fund carry trades. We continue to see substantial upside yet for the dollar-yen over this year.” The USD/JPY is currently trading at 90.30 as of 20:43pm, GMT, with a bullish trend.


The euro’s weak response to a “resolution” of the Greek crisis heralds further weakness for the European currency against the dollar, according to Standard Bank Plc. “Despite assurances from the European Union that it stands ready to aid Greece, the euro has hardly recovered from the $1.3430 lows we saw just before the latest Greek package,” Steve Barrow, head of Group of 10 currency strategy at Standard Bank in London, wrote in a research report today. “To call this a dead-cat bounce would be a good description, as long as we left out the word ‘bounce.’” The euro will fall to $1.25 “over the next few months,” he said. The EUR/USD is currently trading at $1.3632 as of 21:05pm, GMT, with a bearish trend.

Crossing of two moving averages and closing price of the candle is above the short term moving averages.

MACD crosses the signal line upwards.

RSI (Relative Strength Index) is in a clear uptrend.

Bollinger Band gives us a bullish signal after a closing of the candle is above the middle band.

EUR/USD (Daily Chart)

The euro fell against the greenback on Thursday as comments by the European Central Bank reinforced the view interest rates in the region will remain low in the foreseeable future. The euro rose earlier in the session after Greece's sale of 10-year bonds drew solid demand. It later succumbed to selling pressure after European Central Bank President Jean-Claude Trichet stuck to his view euro zone economic recovery would be uneven and fragile. The ECB took a small step towards unwinding some extraordinary support for the economy it left much of its cash buffer for banks in place. "Although easing concerns over Greece have likely caused a reduction of short euro positions over the last couple of days, market enthusiasm for buying the euro remains limited," said Vassili Serebriakov, a currency strategist at Wells Fargo Bank. The EUR/USD is currently trading at $1.3578 as of 20:12pm, GMT, with a bullish trend.

Investors should use the U.K. pound to fund foreign-exchange bets instead of the Swiss franc or Japanese yen given those nations’ central banks are more likely than Britain to intervene in currency markets, UBS AG said. Mansoor Mohi Uddin, the chief currency strategist at UBS in Singapore, recommended selling the pound against the dollar if investors think global economic growth will be sluggish, and buying sterling if they want to bet on a stronger rally. “Investors should now consider trading directional views via the pound/dollar,” said Mohi-uddin in an interview. “In contrast to the Japanese yen or the franc, the U.K. authorities have stopped intervening unilaterally in the sterling market.” The GBP/USD is currently trading at $1.5030 as of 20:30pm, GMT, with a bullish trend.

Canada’s dollar traded in a range as stocks swung between gains and losses after an index of Canadian business activity rose less than forecast in February. The Ivey Purchasing Managers index rose to 51.9 last month, below the median forecast of 56 in a Bloomberg News survey, and Canadian building permits unexpectedly fell in January, a third straight decline, a separate report showed. “A lot of the good news is already priced into the Canadian dollar,” said Shaun Osborne, chief currency strategist in Toronto at Toronto-Dominion Bank, Canada’s second-largest lender. “Today’s numbers were not that impressive, but there’s other data that suggests the economy’s on strong footing.” The USD/CAD is currently trading at 1.0310 as of 20:51pm, GMT, with a bullish trend.

The British pound rose on Wednesday, lifted by a survey showing an unexpected jump in UK services sector activity and data revealing a solid rise in consumer confidence. Analysts/traders said the figures lifted expectations the UK economy may be recovering faster than previously thought, lessening concerns that Britain could slip back into recession, though the sustainability of any recovery was still up for discussion. UK manufacturing PMI data released on Monday was also robust, showing Britain's manufacturing sector expanded faster than expected in February. But trade was cautious after the volatile moves seen over recent days."Given how volatile sterling has been recently, people don't want to be caught on the wrong side," said RBS currency strategist Paul Robson. The GBP/USD is currently trading at $1.5100 as of 20:21pm, GMT, with a bullish trend.

The euro against the greenback as Greece announced spending cuts and tax increases, spurring speculation the nation can tame the European Union’s biggest budget gap. The greenback fell against most of its major counterparts as commodities rose, increasing demand for currencies tied to growth. The euro rose for a second day against the yen as Luxembourg’s Jean Claude Juncker, who leads the group of the region’s finance ministers, said he welcomed Greece’s 4.8 billion euros ($6.55 billion) of deficit cuts. Greece’s plans confirm “the Greek government’s commitment to take all necessary measures to deliver the program’s objectives and in particular to ensure that the 4 percent of GDP deficit-reduction target for 2010 is met,” Juncker said in a statement. “Greece’s ambitious program to correct its fiscal imbalances is now credibly on track.” The EUR/USD is currently trading at $1.3698 as of 21:01pm, GMT, with a bullish trend.

Canada’s currency advanced for a fourth day, touching the strongest level in six weeks, as higher crude oil and equities burnished the appeal of currencies tied to growth. The dollar “is just consolidating its gains before another move in its favor,” said Firas Askari, head currency trader in Toronto at Bank of Montreal, Canada’s fourth-largest lender. He predicted the currency would “test” the C$1.0250 to C$1.0285 area. The Bank of Canada kept its overnight lending rate at record-low 0.25 percent yesterday. Its statement excluded a reference to price risks tilted downward and central bank flexibility. The next rate decision is April 20, followed by a Monetary Policy Report with a new quarterly forecast on April 22.

The strike in Greece may escalate, as the rescue government plan will fail. The government takes decision to raise the taxes in Greece that may cause wave of strikes in the southeast European country. The fuels, tobaccos, alcohol, VAT taxes, cutting salaries and so on could help to the country to take control over the rising national debt but the population may not allow to do it easy. The crisis from Greece may spread in other countries close to Greece like Bulgaria, Romania, and Italy also to countries close to Greece debt like Spain, Portugal, Ireland and others. The euro probably will became weaker in the coming weeks as the mid-term forecast made by World-Signals.com is for levels Euro-Dollar of 1.28.

Source: World-Signals.com 

The euro rose against the greenback after the Greek government said it will announce new deficit cuts tomorrow, increasing speculation that a solution to its debt crisis may be nearing. Euro-dollar “made a marginal new low this morning and has so far not sustained the move,” Citigroup Inc. technical analysts led by Tom Fitzpatrick in New York wrote in a report today. “The failure to sustain the move to a new trend low this morning is beginning to suggest a turn back up is the risk as was the case at the start of March 2009.” The Greek government will announce as much as 4.8 billion euros ($6.5 billion) of additional deficit cuts tomorrow ahead of a March 16 deadline, bowing to pressure from the European Union and investors to do more to tame the region’s biggest shortfall, a person familiar with the plan said. The EUR/USD is currently trading at $1.3600 as of 8:00pm, GMT, with a bullish trend.


The British pound fell on Tuesday as the prospect of a hung parliament continued to pressure the currency, though it stayed above low against the greenback hit the previous day. The pound bounced back from a session low of $1.4856, brushing off further attempts to take it lower, but it lacked momentum to recover above $1.50, where it briefly hovered overnight after a significant decline. A new opinion poll published showed the opposition Conservatives regaining their advantage, while another showed their lead shrinking. Both still suggested Britain was heading for a hung parliament. The GBP/USD is currently trading at $1.4960 as of 20:32pm, GMT, with a bullish trend.

The dollar remains in a downtrend against Japan’s currency and may weaken below 87 yen, JPMorgan Chase & Co. said, citing trading patterns. The greenback faces “an important test” this week with a potential decline below the 88.55 to 88.25 yen level targeting a move to as low as 86.95 yen, said Niall O’conner, a technical analyst at the second-largest U.S. bank by assets. That area includes so-called support near the February low of 88.56 yen and the 61.8 percent Fibonacci retracement at 88.25 yen of the dollar’s advance from a 14-year low of 84.83 on Nov. 27 to 93.77 on Jan. 8, he said. The USD/JPY is currently trading at 88.70 as of 20:36pm, GMT, with a bearish trend.

The GBP/USD is currently trading at $78.55 as of 20:06pm, GMT, with a bullish trend.

The British pound sank against the greenback on Monday and looked set to post its biggest one day drop in more than a year after polls showed a growing chance that an upcoming general election may result in a hung parliament. Having broken through the key $1.50 level, the pound at one point dropped roughly 3 percent on the day, with traders citing selling by a UK bank after AIG said it would sell its Asian life insurance business to UK insurer Prudential Plc. Analysts said negative sterling sentiment snowballed in London trade, leading to frantic selling in the UK currency after it broke through key technical levels against the dollar. "Sentiment on sterling is very bad at the moment. Given half a chance, people will just sell it," said Paul Robinson, chief sterling strategist at Barclays Capital in London. The GBP/USD is currently trading at $78.55 as of 20:06pm, GMT, with a bullish trend.

The euro may fall further in the near term to $1.3451, where buy orders may be clustered, according to Mizuho Corporate Bank Ltd. Europe’s currency has lost 5.5 percent against the dollar this year on concern nations including Greece and Portugal will struggle to contain their budget deficits. “There are absolutely no signs on the monthly candles that the sell-off in the last three months may be coming to an end,” said Nicole Elliott, a London-based senior analyst at the bank. “What we are seeing now is a deeper correction in the euro than I’ve expected. We will need some dramatic shifts in a weekly chart to be able to say the trend is reversing.” The EUR/USD is currently trading at $1.3560 as of 20:30pm, GMT, with a bullish trend.

Canada’s dollar gained after a report showed the nation’s economy expanded in the fourth quarter more than economists forecast. The lonne gained as the nation’s economy expanded. The Bank of Canada will hold its overnight lending rate at 0.25 percent at its meeting tomorrow, according to all 21 economists in a survey. “We expect the Bank of Canada to turn more hawkish as the economy grew much faster than the Bank of Canada expected,” Sebastien Galy, a currency strategist at BNP Paribas in New York wrote in an email. “Some evidence that liquidity is creating already excesses in parts of the Canadian economy should force it to tighten much faster than the Fed.” The USD/CAD is currently trading at 1.0418 as of 20:43pm, GMT, with a bearish trend.

Euro / US Dollar

The EURUSD has been unable to mount much of a rally since the low was made on February 18^th.  Staying below 13695 keeps the pair headed lower towards the Fibonacci extension near 13100.  A rally above would expose 13800-40.

British Pound / US Dollar

The GBPUSD has plunged in what is clearly a 3^rd of a 3^rd wave decline (3 of 3 of 3 from 15831).  Fibonacci extensions are just below today’s low.  A series of small 4^th and 5^th waves should unfold, keeping the pair headed lower.  15000 is short term resistance.

Australian Dollar / US Dollar

After reaching the area of the former 4^th wave (common topping area) and slightly exceeded the 61.8% retracement of the previous decline, the AUDUSD rolled over and declined to 8800.  That decline may be just an x wave in a larger correction that will exceed 9077.

New Zealand Dollar / US Dollar

The NZDUSD is in the same situation as the AUDUSD.  The rally from 6804 may have completed the entire correction from 6804 but respect the potential for an extended and more complex advance.  Staying below 7090 keeps me bearish.  Above there would expose 7156-7201.

US Dollar / Japanese Yen

I wrote last week that “the USDJPY rally (from 8481) is corrective, which leaves the pair vulnerable to weakness below that level.  Still, a larger correction may be underway since the decline from 9380 is not impulsive either.  The pair has rolled over and dropped through 9140 and 9056.  The count above suggests additional weakness below 8854.”  8975-9040 is resistance.

US Dollar / Canadian Dollar

I am extremely bullish against 10368.  The rally from there is in 5 waves, which indicates, with a high degree of confidence, that the larger trend has turned up.  10480-10520 is short term support.  The minimum objective is above 10875.

US Dollar / Swiss Franc

No change:  “I remain bigger picture bullish the USDCHF but bulls should keep risk tight given the near term chop.  Bottom line; stay bullish above 10645 (be aware that a rally above 10902 could complete a diagonal from 10607).  11026-11091 is a target area.”  A drop below 10700 would delay the bullish bias.

Gold

Gold has broken below a short term channel and price declining from the top of its long term channel warns of a more significant downside reversal.  The short term structure is clearing up.  The decline from 1132 is in 5 waves, which indicates that the larger trend has probably turned down.

Light Crude

An expanded flat is probably nearing completion in crude.  I wrote last week that “if this is the pattern unfolding, then price would exceed 7804 before the larger trend turns back down.”  I favor the downside against 8078.    Coming under 7613 would probably be enough to suggest that the larger trend has turned down.