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Volatility is the trademark for today’s trading
Written by article default Tuesday, 21 September 2010 14:17
The dollar gained against most of its major counterparts, but traded lower against the European common currency where uncertainty still dominates trading as evident signs of global recovery’s slowdown have emerged over the past few weeks.Investors still look upon the US as a savior from easing conditions, where the highlight of the week will arrive from the US housing sector; the one that initiated the worst financial crisis in decades, with expectations showing that builders’ confidence remains at 17 month record low where housing starts and building permits are projected to show easing demand for houses.
Moreover, investors look upon the Fed’s Rate Decision, to be released tomorrow, with expectations that the bank will preserve its key lending rate at record low of 0.25 percent.
The US dollar index, which tracks the performance of the dollar against six major currencies, including the Pound, Euro and the Yen, fell on the daily scale to trade at 81.17, compared with the opening levels of 81.24.
The drop in the dollar along with investors targeting safety caused gold prices to appreciate severely over the past period and to continue on hovering near its new historic highs that was set on Friday at 1,283.75.
Gold for immediate delivery rose to trade at 1279.81 OZ, compared with the opening levels of 1275.80 OZ, where it managed to reach the highest at 1283.05 OZ and a low of 1274.40 OZ.
The Euro rose against the dollar to trade at 1.3094, compared with the opening levels of 1.3060, where the pair reached the highest at 1.3121 and the lowest at 1.3032.
The bullish trend is projected to remain for the remainder of today, targeting 1.3330, which would pave the path for the pair to target 1.3685.
Meanwhile, negativity from the momentum indicator might force the pair to perform a correctional move before extending the suggested week’s target. Four-hour closing above 1.2915 is required for the pair to achieve those targets.
As for the sterling, the GBP/USD pair slumped on the daily scale, ahead of the release of BoE’s minutes report for interest rates that the bank preserved.
Next month the government will announce the details for the biggest fiscal tightening plan in nearly 70 years, in order to reduce the country’s budget deficit that totaled to 11.1 percent of 2009 GDP.
The British pound depreciated against the dollar as the pair slumped to trade at 1.5602, compared with the opening levels of 1.5651.
The pair’s trading range is set for today among 1.5425 and 1.6000, where a daily closing above 1.5560 would pave the path for the pair to target 1.6000. The slump witnessed in the pair’s trading today is a result of a correction before the pair target 61.8% Fibonacci levels at 1.5875.
Since the intervention of Japan’s government in the market, the USD-JPY pair fell to trade near 85.80 levels, a strong resistance, where it failed to breach for three consecutive trading days.
The pair is currently trading at 85.67, compared with the opening levels of 85.73, while setting a high of 85.80 and a low of 85.48.
A bullish trend is projected for the remainder of this week, which starts initially with the breach of pivotal resistance of 86.25. Pointing towards the expected upside built on the breach of resistance of the bearish channel that has currently turned into support at 84.40. Thereby, stabilizing above this level is a vital factor in continuing the aforesaid ascend.