Asian USD Session

Written by Research | 12 April 2010

As expected

The pullback on the USD was due mainly on two reasons that most of the market investors shifting to the Dow upwards reaction above the 11K mark has shifted the interest from the USD and to top it all is the Europe's lifeline to Greece has added impetus to the Euro more than the Pound as inflation issues have circled in the UK.

Although, these mixed reports looks to be the supporting fundamentals in the corrective mode that we have anticipated from our previous market view. The precious metal has indeed had a good run to as high as $1164.80/oz. for Gold as of last week's movement and did meet our initial objective more than expected. In spite of the numbers and the increased trading ranges established by the USDX and the price of Gold the overall outlook is on the uptrend. The USD corrective mode is in line with what we have perceive as the 2nd quarter of the year has opened some interest and build up on the commodities specially the precious metals in line also with the CRB's measure on the index towards the north.

The EURUSD and the GBPUSD have made some head way during the Asian opening which may lead into the markets this weeks to follow. With a working price of 1.3668 and 1.5450 respectively is very close to the initial objectives of 1.3880 and the 1.5580 levels which may find a slight resistance. The Asian opening sessions would obviously indicate the opening gap will retrieve and pull back some pips on an intra-day basis as the daily opeing prices would exhaust and try to build some interest along the week's ealier session and would spillover to the European and American trading sessions.

Although, when volumes does build up these prices may also pierced through initially but with some lower closing prices. This may appear to be moving lower as the prices would be on the high side as it did in the Asian sessions. The obvious mid-term trend for a corrective price range higher is the likely scenario for the time being and price adjustments are made. This also goes the same with the USDJPY and the USDCHF contrary to the AUDUSD which we still hold favorable as an arbitrary hedging strategy for any long USD positions as the investors shifts may enjoy more the rate differentials than holding the USD for the meantime. Currently working at the AUDUSD 0.9360 in the Asian opening sessions were the USD has weakened due to the recent reports that prompted this correction for the US dollar.

Whenever, there may be a follow through on the prices we may also see the 0.9440 still as the initial target levels.These trading ranges established by the currencies have been the ideal situation which we have anticipated for as long as the behavioral movements hold true to their ranges the likey case scenario for this week and thereafter. Until we would see some signals that would say otherwise, the continued strength on the USD will have to continue after the correction on a later time period. But as of now we really doubt whether there may be some significant changes. As the overall picture still remain bearish for the European currencies, expect these major corrections always to be present within a major trend in both directions.

As most investors will weigh heavily more on the Stock market advances and would simply have more confidence and shift funds were volumes and momentum may also build up for the start of the week in anticipation for a follow through led again by technology stocks and commodities that has been in the spotlight due to their advances in prices levels.

Good Luck and best to your trades!