Majors Mix Trend

Written by Research | 22 April 2010

Fundamental vs. Technical

The EUDUSD is trading near a 2 week low on concern that the aid bailout amount for Greece will not work but merely try to stabilize its debt for the time being. Their austerity and other programs to pickup their economic conditions were not even enough as the deficits also adds to the negative sentiments.

To be able to counter any blow from market conditions that may ripple effect in the rest of the EU community sill needs the helpa and assistance from the rest of the EU.

The main technical resistance for the EURUSD is at 1.3500 price levels, the momentum is still bearish as we have previously presented in our Marketview dated April 18. The EUR/USD may trade with a probable low between 1.3280 and a 1.3380. It is currently working at the 1.3338 levels. The obvious major trend for the EURUSD is still bearish with the steadier Pound benefiting from the negative sentiments over the Euro. As the day to day trading are quite mix with market participants are spread amongst the other major pairs. Meanwhile the GBPUSD, steadier price movement is just resting slightly above the previous months high which technically still weighs heavier than the EURUSD which is more fundamentally influenced by the reports.

Influencing the cross rates as the EURGBP is now working at its psychological support of .8650-60 price levels which has been strong from the past months market performance. Breaking this price will prove to be a probable trend reversal from its high of .9150 from March. Currently at .8657 low. If this hold true it may be the same reactions as what has happened with the Aussie at the 0.9155 low from Monday Asian sessions.

The AUDUSD making some real wild swings from its Asian opening sessions last Monday and the quick recovery back to the 0.9337 high and currently at the 0.9262 mid-price levels. The key prices to watch are the critical 0.9180- 0.9220 range where the Aussie could revert back to its low. however, the mid-term trend is still higher but to break the all important resistance at 0.9330-80 is important too. As the candlestick weekly bar formation for the AUDUSD has a spike price reversal pattern but not a trend reversal. Wider trading is expected this 2nd quarter of the year entry.

Relative to the Aussie is the NZD where its cluster of bar formations on the weekly has kept most traders confused. The classic three bar cluster showing a short term price reversal held true however, this weeks bar is a 100% corrective retracement of last weeks bar. Although, by sticking with the major trend is the logical approach to trade with but remember that within a major trend comes with major corrections with the same trend.

The Dollar traded with a mixed trend versus the majors with Crude oil pulling back after the Inventories data showed an increase of 1.9M barrels. Meanwhile, Gold price still continued and increased for another day closing at USD1146/oz. Today, PPI is expected at 0.4% vs. -0.6% previously. The Initial Jobless Claims is expected at 450K vs. 484K previously and the Existing Home Sales is expected at 5.3M vs. 5.02M previously. These are the important fundamentals to watch for and the last trading day for the week closing on the Majors and the general market sentiments may or may not reinforce the USD.

Volatility will increase as we have just entered the 2nd quarter trading and so many fundamentally oriented market influenced have kept other investors in the sideline as we monitor the risk appetite and aversion through the market sentiments and volumes build up or down as we go along for the months trading.

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