Range trade if you dare awaiting the next headline

More Ken Veksler, 3 days ago07 December 2011 A quiet night in Asia, fortifying the narrowing ranges of the various G10 currency pairs.
Asian bourses failed to produce any significant moves one way or another, thus unlikely to give the European and US market any lead today. Australian GDP came in a little better than expectations overnight, and this gave the little battler a small boost as overall the USD complex faded somewhat. The day ahead holds little in store for us by way of data releases and the market seems to be in a firm wait and see mode looking for the potential 50bps tomorrow for the ECB and equally (if not more so) importantly headlines and decisive action out of the summit concluding on Friday in the Eurozone.

There are plenty out there looking for that late Christmas equity rally, and as things go there may be the element of self fulfilling prophecy to this. Needless to say indices across the board are being artificially sustained and aren’t really going anywhere while the price action certainly suggests there is an underlying hope for growth in the next 10 or so days.

Currencies are reacting in much the same way and holding their proverbial breath in expectation of something positive. The mother of all disappointments may well be awaiting them shortly...
With regardto  levels for the day across various pairs, here’s how I see it;

EURUSD: The pair still needs to clear the most immediate hurdle of 1.3450 and even then, the next port of call will be 1.3530 if we can even get that far. Rally faders will be coming in around there and stops will be placed above. On the downside look for 1.3330 to be the target, but once again if this market can even get its act together.

GBPUSD: The line in the sand the last couple of days has been that 1.5550 level and was again tested last night on the European close, to only bounce again into roughly where we trade this morning. Sellers will be lining up around the 1.5680/5700 level with stops going in much higher looking for a break of 1.5550 and move into 1.5400 and lower.

AUDUSD: The pair looks confined for the time being in the 1.0330 – 1.0150/30 range and like all other high beta pairs will move in accordance with the next headline.

USDCAD: The 1.0080 support level was finally broken overnight with stops below taken out, trading down into 1.0065 lows. We walk in this morning trading right at that breakout level and dip buyers might be interested in picking up the pair around the 1.0050/70 levels or even here for that matter and placing stops below 0.9970 to be safe initially, looking for a return into 1.0300/50 and beyond.

A quiet day ahead all in all folks, with everyone anxiously awaiting the next two days of risk events.

Tags: EURUSD, GBPUSD, AUDUSD, USDCAD, Gross Domestic Product 243 Views 1 Like! 0 Comments 0 Follow In order to like something, you need to be a member.
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