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Forex Market Technical and Fundamental Recap

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Jul 1, 2009.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
    Likes Received:
    Today's Forex Analysis summary.

    The GBP USD surged to the upside overnight despite news that the U.K. economy shrank more than previously forecast. The U.K. Gross Domestic Product report showed that during the first quarter the economy suffered its biggest contraction since 1958. Weakness was seen across the board in the economy as everything from construction to services showed some sort of weakness.

    The three-month long rise in the British Pound has defied most analysts who are in the same camp as Bank of England Governor Mervyn King who believes that the road to recovery will be long and hard. Even if the global economy is beginning to bottom, the U.K. economy still faces rising unemployment. This is a lagging indicator, but if unemployment continues to march higher then eventually consumer spending will suffer. If consumer spending falls along with confidence then the economic recovery may slow considerably.

    Once again sellers repelled the EUR USD as it attempted to run stops over the last main swing top at 1.4177. The subsequent closing price reversal top and close under a key retracement zone at 1.4042 to 1.4112 are indications that this break may have attracted some real selling pressure.

    A follow-through to the down side tomorrow is needed to confirm the reversal top. If this pattern is verified, then look for a minimum retracement to 1.3950 to 1.3903.

    The main trend remained up in the USD CAD as a downward reversal in crude oil prices weakened the Canadian Dollar. Weak Canadian economic news combined with a drop in U.S. Consumer Confidence also helped pressure the Canadian Dollar.

    Technically, this pair is poised to continue to rally with a Main Top at 1.1813 the first upside target followed by a major 50% retracement level at 1.1922. On the downside, trailing retracement support comes in at 1.1289 to 1.1207. A test of these levels would not turn the main trend to down, but would instead set up a buying zone.

    Following an attempted breakout over the last main top at.8117, the AUD USD ran into another layer of resistance at .8238 and .8264. Trader aversion to risk grew as the New York trading session progressed. By the end of the trading session, this market produced a closing price reversal top, signaling the start of a possible decline.

    The NZD UZD failed to break out to the upside as it ran into resistance at a 50% retracement price at .6553 and a previous main top at .6590. These resistance points triggered intraday selling pressure which created a closing price reversal top formation. A follow-through to the downside tomorrow will indicate the possible start of a decline to .6211. After it was reported that U.S. Consumer Confidence had dropped; traders sold risky assets including the New Zealand Dollar.

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