We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
GBP/USD
Mixed
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The $AUD is pressuring four-month trend support against its US counterpart as sellers fight to reassert the dominant, long-term downtrend. Get your market update from @IlyaSpivak here: https://t.co/Bup64Arva9 https://t.co/OLpavqPOVA
  • RT @globaltimesnews: A total of 1,052 cases of #coronavirus have been reported as of Jan 25 in #Hubei Province, with 129 in critical condit…
  • RT @FactSet: $SPX is reporting revenue growth of 2.9% for Q4, led by the Health Care (11%), Utilities (9%), and Communication Services (9%)…
  • The AUD has been hit by the risk-appetite pullback occasioned by the spread of Wuhan-strain coronavirus. This week may see domestic focus return, if headlines allow, with key inflation data due. Get your $AUDUSD market update from @DavidCottleFX here: https://t.co/UIpwno0pSq https://t.co/kib4d1mA0q
  • RT @anilvohra69: USD inverted (red) is correlated to Excess Reserves (blue) and Reserve Balances (green). 1/2 https://t.co/bbO1pPWY4F
  • RT @FactSet: $SPX is reporting a decline in earnings of -1.9% for Q4, led by the Energy (-42%), Consumer Discretionary (-14%), and Material…
  • Becoming a forex trader means living and breathing the excitement, risk and reward of trading in the biggest and most liquid market in the world. Do you have what it takes? Read here to discover the qualities and processes it takes to build consistency: https://t.co/EfWEACQ6Cz https://t.co/6iMyDFqnqe
  • Knowing how to accurately value a #stock enables traders to identify and take advantage of opportunities in the stock market. Find out the difference between a stock's market and intrinsic value, and the importance of the two here: https://t.co/QszmdZFxlk https://t.co/2mjzvYvgSn
  • Previewing the Texas Rangers new home! https://t.co/WITZGSQPlc
  • Thanks for having me on @MartinSEssex https://t.co/fg8uOe16wr
Fundamentals and Technicals Point to a Termporary Equilibrium

Fundamentals and Technicals Point to a Termporary Equilibrium

2010-03-08 15:15:00
John Kicklighter, Chief Currency Strategist
Share:

Congestion is setting in for the majors and many other highly liquid currency pairs. This is an unusual turn of events considering equities and commodities have rallied so astutely the past few weeks. Normally, I would say that this imbalance between markets is unsustainable; but recent history has proven that these market's can part ways for some time. Nonetheless, I believe bigger fundamental themes are bound to reengage and technical patterns call for breakouts. In addition to the ongoing Greek situation (which I believe anyone who ignores it does so at their own risk), global financail markets have to further interpret the risk associated to China's announcing it would nullify local government loan gaurantees and Dubai World's postponement of another debt payment. The markets are clearly not as stable as current valuations would suggest. This would be an assumable risk if only the expectations for return would match. However, they do not.

For positions, I am still holding my USDJPY long position and have trailed the stop. It is reduced sized; but a notable pull back or clear break of 92 could encourage me to build it further. Until it breaches 92, the pair is still within the current of a bear wave. Nonetheless, it is best to build the position at attractive levels on the potential of a long-term, fundamentally-derived reversal. This past week, the benchmark, three-month US Libor rate finally advanced beyond its Japanese counterpart. This is not an insignificant event as it strips the dollar of much of its funding appeal if there is a cheaper and more stable alternative in the Japanese yen. Scanning the rest of the market, there is fundamental and technical trade potential in many pairs; but most can be put on hold until something meaningful happens. I will watch EURUSD and USDCAD particularly closely. A short-term bullish break on the former above 1.3750 would offer a good short-term, counter-trend trade. For USDCAD, 1.02 is a clear range support that can provide a break or range reversal. I would only play the latter scenario because parity could step in as a quick secondary support.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.