Cross Rates Trend following

Written by Trade Team | 27 July 2010

With consumer confidence falling down in July to 50.4 from 54.3 in Jun and the Fed manufacturing index to 16 from 23; the USD gains against the major curreny pairs except for the Pound.And the USDX falling slightly at the 81.95bp levels before the market news have been built in anticipation and speculative trades were increasingly favoring a negative sentiment.

Meanwhile European equity has been on a roller coaster ride with gains and losses in between has been the core element for increased volatility which we have mentioned that has been creeping higher specially the three trading days of the week towards the end of the month.

These movemnts clearly shows the position adjustments that major players and institutionals are doing in the market place.Although, we still have a few trading days to go we would be more inclined to say that the increasing wider swings would prevail.

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With a technical resistance for the GBPUSD at the psychological price of 1.5580/90 may also hold for the time being.The technical angle of acceleration for the EURUSD and the GBPUSD has been quite convincing from the very start of last few weeks and has made some real legs to go higher. As some institutional investors who happens to have moved some funds away from the precious metals and brought them back tot he European currencies the same way they made their exodus when the Euro was falling from the Greek crisis.The correlation is obvious but some have not been able to relate to this case scenario.

The heavily favored cross rate of the GBPJPY has been our closest call with the GBPUSD slower than anticipated, the GBPJPY was more likely to move which it has been working now at the 136.61/70 levels from a low consolidation of 133.37 which was the ideal moving average price entry for long trades.And the GBPUSD has been fueling the market for another upward move towards the end of the week.

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As the USDCAD have touched its weekly support 1.0255 within a symmetrical triangle formation have been quite encouraging as it now tries to work on the 1.0380 and targeting it objective of 1.0450/90 range for the next few days.As volume still have been favorable for the cross rates while the majors have been moving higher. Some traders were reluctant to chase the market at a turtle's pace. so the ideal cross rate was the better choice to go.

The AUDUSD and the NZDUSD have been in tandem with their directional trend higher. As we still maintain our stance on these two pairs to continue their trend withpout being really bias with our positions. The market view report has been in effect for almost more than a week. And the major reports that came out have been the confirmation of our call. Curently working at he slight correction for the Kiwi at 0.7310 from a 0.7395 intra-day high. while the AUDUSD is at 0.9005 corrective mode from a 0.9067 high resistance level from May's weekly top. Reluctance for traders to come in now are obvious as the market prices are working on their resistances where no one would even want to sell. For scalpers we think that they would not even dare to trade within these levels.

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