Saxo Bank | Mar 02, 2012 08:21AM ET
today shows further signs of falling through key swing support levels, while the JPY is weak on inflation data and the oil spike. The latter is also finally seeing CAD awaking from its slumber.
EUR/USD has fallen through the first key support area in the 1.3300/25 area, and if it closes well below there today, we begin to have confirmation that the lower range toward at least 1.30 is coming back into play. The relative resilience of the US dollar after yesterday’s blowout rally in risk is notable, with the focus on the USD/JPY pair at the moment after Japan released important inflation data overnight and on the latest spike in oil prices.
Chart: EUR/USD
EUR/USD has failed a test of important support. The USD picture is mixed elsewhere (USD/CAD has broken lower and GBP/USD remains above key support at 1.5900, so the jury is out on the USD part of the EUR/USD equation. Today’s close is a key test of whether the bias is pivoting back to the downside now that the LTRO is out of the way and the focus switches to whether Portugal becomes the next Greece and on German politics and its stance on bailouts.
Chart: AUD/CAD
CAD made a move recently, breaking down through the 0.9900 level in USD/CAD and finally taking a chunk out of the Aussie, as the latter currency has finally consolidated against the rest of the G-10 after its recent record run. Oil is a critical part of the equation here, as any threat to Iranian and Persian Gulf exports will hit Asia – and in particular China – the hardest and as oil is Canada’s most important commodity export. As well, from a valuation and interest rate differential perspective, this pair long ago became overvalued.
Otherwise, there is not much in the news mix for the rest of the day in terms of the economic calendar, save for the latest Canadian GDP report for December, which is a more interesting than usual as CAD seems to be awaking from its slumber. On Monday we get the latest batch of services PMI’s from around the world.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.