FOREXYARD: Forex News Blog | |
- GBP/USD Tumbles on Retail Sales Report
- USD/CAD Pullback May Spur Bids at Moving Average
- European Debt Concerns Reemerge
| GBP/USD Tumbles on Retail Sales Report Posted: 24 Mar 2011 05:44 AM PDT
The weaker than expected UK retail sales drove traders to sell the pound versus the dollar. After reaching a new year high, GBP/USD is falling close to a technical level following two consecutive days of sharp price declines. February retail sales tumbled 0.8% from January. Economists had forecasted a contraction of only -0.5%. The negative tone of the report was reinforced as the January numbers were trimmed to 1.5% from 1.9%. The disappointing consumer numbers may force economists to trim their Q1 GDP estimates, a setback for Bank of England inflationary hawks who want to raise interest rates. The disappointing consumer numbers comes on the heels of Tuesday's strong CPI data that showed inflation for 2010 rose by 4.4%, above estimates of 4.2%. The inflationary pressures had caused many short term interest rate traders to bring forward their estimates for a rate hike by the BOE and the GBP/USD rose to its highest level of the year at 1.6400. However, yesterday's BOE meeting minutes disappointed traders as no new signs of rising interest rates were given by the central bank. This caused a sharp selloff in the GBP/USD which continued through today. Stops were triggered as the pair moved below the 1.6200 level to a low of 1.6148, roughly a 61.8% Fibonacci retracement of the move from the mid-March low of 1.5977. A breach below today's low would target the mid-March low. To the upside, resistance is found at 1.6200, 1.6340, and 1.6400.
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| USD/CAD Pullback May Spur Bids at Moving Average Posted: 24 Mar 2011 01:02 AM PDT
Political strife in Canada may bring weakness in the value of the Canadian dollar allowing for traders to find entry opportunities near a key moving average. The unveiling and subsequent rejection of the Canadian budget by three opposition parties does not bode well for continued strength of the Loonie. Despite the currency's strong performance, the political gridlock may bring a pullback in the current downtrend for the USD/CAD. Moving to the daily chart, the pair has found significant resistance near the 100-day moving average (red line) which comes in today at 0.9930. This level may offer traders a good entry point into the downtrend. Also providing resistance has been the 50-day moving average (green line) at 0.9840. Further resistance may be found at the January high of 1.0060. Targets for the pair should be Friday's low of 0.9750, followed by the all-time low for the pair at 0.9666.
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| European Debt Concerns Reemerge Posted: 23 Mar 2011 11:30 PM PDT
As debt concerns reemerge in Europe especially in Portugal, the euro appears to have dipped against its primary currency rivals in trading yesterday. The euro zone's Economic Summit is due to meet today to discuss euro support mechanisms and government finances throughout the region today. Various leaks from the meeting will emerge throughout the day, but most investors appear to be assuming a rise in risk aversion throughout the day as the EUR is priced lower. Here is a roundup of today's leading events: French, German and euro-zone Manufacturing and Services PMI – 8:00, 8:30, 9:00 GMT – EUR These are leading indicators of economic health and as the region battles sovereign political crises in debt-ridden in Portugal, any better than expected data might provide a much needed boost for the common currency, particularly data from Germany, the region's largest economy. Poor data however, will likely put further pressure on the euro as it will intensify fears that sovereign debt issues will spread across the region. 9:30 GMT: GBP – Retail SalesThis monthly report reflects the change in the total value of inflation-adjusted sales at the retail level. This indicator always provides for extreme market volatility in the major currency pairs. If the results turn out to be lower than forecasts, then the GBP may record a fairly bearish session in today’s trading. 13:30 GMT: USD – Durable Goods Order and Unemployment Claims |
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