Speculative outlook

Written by Research / Trade Team | 18 January 2010

Mirror Imaged of USD

The relative market outlook for the European foreign currencies may not be a true mirror image of the USDX as a steadier GBP/USD is seen quite resceptive compared with the EUR/USD that has been weaker the past week.

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Regardless of the economic reports between the two trading partners with the United States; the Pound is more resilient and moving just right as based on the behavioral market movements and direction it has been doing for the past year. The 1.5830 - 1.6060 is the inital support levels that should be carefully watch over this 1st quarter of the year. The 1st leg of the GBP/USD may still realized if and when the US Dollar looses its momentum for the first quarter. However, the ladder like formation for the UD to move higher may prove to be maintaing its levels with the US governments persistency in talking it higher despite of some negative reports from industry such as unemployment and real estate figures.

GBP/USD                                                                                        EUR/USD

And this goes the same with the Euro although, it performance for the first couple of weeks has not been quite convincing has it has been weaker than the GBP/USD relative to its directional movement heading south. The correlation of which with the volumes and open interest in the financial futures has not been built since risk appetite and risk aversion has not been well defined in this first few trading days. It will present itself within the first quarter, although we have stayed firm in our outlook since the closing of the year after carefully considering adjustments and position sentiments of the traders.

The USD/CHF and the USD/JPY is more at their relative directional trend which is more in line with the USDX chart on a technical basis. Although, in a day to day comparison , the USD/JPY has a relative buying divergence that occured since last week giving it an alternative attraction other the Gold commodity. With the Yen topping out at the 93.77 high and dropping down back to the 90.60 from last months low of 85.95 may welldefine the risk factor if and when an investor decides to trade it.

USD/CHF                                                                              USD/JPY

With Gold prices still hoovering within its projected range currently at $1,130.00 /oz. is just about right with its inital objective at $1,158.20 - $1,163.40 within a thre (3) week span, as long as the volume build-up will sustain its levels with the USDX making no dramatic movements of its own. 

The Australian Dollar ( Aussie ) and the New Zealand Dollar has well been well bid moving forward maintaining at .92.33 and .7368 levels respectively. Carry trades of the US Dollar and Aussie has been quiet and interest or risk appetite would build up the Aussie more in this second month of February in spite of the talks on future interest rate hikes with the Federal Reserve Bank. 

AUD/USD