EUR/USD Technical Analysis for July 6, 2011
The EUR/USD fell hard in reaction to the Tuesday debt downgrade given to Portugal. The markets fell roughly 100 pips off of the announcement. However, it looks as if the 1.44 may be some kind of support, so we are captious about selling. In fact, we feel this pair is too saddled with headline risk right now to get involved with it.
EUR/USD Fundamental Analysis for July 6, 2011
The EUR/USD continued to fluctuate within a downside bias on Tuesday amid jitters over the outlook for Greece and default warnings from rating agencies, reminding investors that the crisis is far from over.
The euro is still holding the strength despite the downside move seen with the start of the week, as comparing the default warning with the default risk seen before the austerity measures where passed by parliament in Athens, we are much better off!
On Wednesday, the pair will continue to fluctuate on the back of the news though we see the chance for the euro to regain the upper hand with the rate bets back in play ahead of Thursday’s rate decision and amid the light load of fundamentals.
Germany will release the factory orders for May at 10:00 GMT and expected with 0.1% drop following 2.8% rise and on the year expected to ease to 1.0% following 10.5%.
The U.S. will release the ISM Services for June and expected to ease to 53.5 from 54.6 in May.
USD/JPY Technical Analysis for July 6, 2011
The USD/JPY rose on Tuesday, but still seems stagnant as the trading range is getting quite tight. The market looks quite content here, and as such, we are not trading this pair at the moment. We don’t want to get involved until we break below 80 or above 82.
USD/JPY Fundamental Analysis for July 6, 2011
The USD/JPY pair advanced early Tuesday to its highest level in five days, as the dollar recovered against most of its major counterparts after illiquid U.S. trading session on Monday due to the Independence Day holiday.
The greenback returned to gains against majors in a correctional movement to cover some of its previous losses . On the other hand, the Japanese yen was little changed against other majors, which reduce its resistance against the dollar pushing the USD/JPY pair to the upside.
The Bank of Japan announced it will support Japanese companies to face the March 11 earthquake aftermath, as it will act as needed to support the recovery.
The market sentiment could shift to higher yielding assets during the upcoming period, after the Greek Parliament passed the second austerity planfor five years, where the Japanese yen could witness more selling pressure against the dollar.
On Wednesday the Japanese economy will publish the preliminary reading for the coincident index for May at 05:00 GMT, where it had a prior reading of 103.6 and expected to rise to 106.1. As for the leading index for May, its previous reading was 96.2 and expected to improve to 99.8.
At 14:00 GMT, the U.S. economy will release the ISM Non-Manufacturing index for June, the previous reading was 54.6 and expected to retreat to 53.5.
GBP/USD Technical Analysis for July 6, 2011
We got a breakdown of the shooting star on Tuesday, and if you were quick, you made good money. However, the 1.60 proved to be too supportive for the bears, and we bounced. However, we feel bearish about this pair over the long run, and days like this just make us want to sell rallies all the more. A break below 1.59 is needed for a long-term sell.
GBP/USD Fundamental Analysis for July 6, 2011
On Tuesday, the pound resumed its advance against the greenback for the third consecutive session after upbeat services report which showed that services sector expanded to 53.9 in June, exceeding both previous and median estimates of 53.8, where a reading above 50 indicates expansion and below 50 refers to a contraction, according to the PMI gauge. The report eclipsed the grim manufacturing and construction reports which signaled an ease in expansion.
On Wednesday, the UK lacks fundamentals while the US will release MBA mortgage applications report for July 1 at 11:00 GMT, followed by ISM non-manufacturing, as of 14:00 GMT, which will retreat to 53.5 in June from 54.6 in May, according to median estimates.
The main concentration will be on the US services gauge after the widening expansion to the manufacturing sector to 55.3 in June from 53.5. Despite the rebound in the dollar, the outlook for the pair remains to the downside as the BoE is predicted to keep lose monetary policy this week and may keep it for a while to boost the fragile recovery whilst the dollar may gain some momentum after the end of QE2 last month which will reduce the supply of the dollar.
AUD/USD Technical Analysis for July 6, 2011
The AUD/USD pair fell on Tuesday, but looked to find support at the 1.07 area. The pair is in a strong bullish market, so we prefer buying on the dips – at least until 1.05 gives way. We have recently made a higher high, and with that, we are still bullish.
AUD/USD Fundamental Analysis for July 6, 2011
The Reserve Bank of Australian (RBA) held the rates unchanged at 4.75% for the seventh consecutive month , putting downside pressure on the Australian dollar. Aussie declined against the dollar as the AiG performance of services in Australia retreated to 48.5, adding the Australian services sector is still in contraction.
Still the economic recovery cycle in Australian is under pressure from the negative results from the natural disaster that hit the nation during the first three months of the year, but the nation showed some improvements this period, signaling recovery signs.
We can see that the Australian dollar will decline again until the employment rates that will confirm the current status of the Australian economy.
On Wednesday, the Australian economy won’t release any fundamental data, but at 14:00 GMT, the U.S. economy will release the ISM Non-Manufacturing index for June, the previous reading was 54.6 and expected to retreat to 53.5.
NZD/USD Technical Analysis for July 6, 2011
The NZD/USD pair fell hard on Tuesday, the pair slowed and seems to have found a bit of support at the 82.50 level. The pair should find some kind of support at these levels, but we are currently looking for a supportive candle. If we get it, we like buying the dips.
NZD/USD Fundamental Analysis for July 6, 2011
New Zealand economy is showing great signs of recovery to unwind the effect of earthquake that hit the country as exports rose significantly, especially dairy products and meat for countries of the Asian region, especially China, supporting the New Zealand dollar to record a new multi decade high against the dollar.
Moreover, business confidence soared in the second quarter as low interest rates and rising commodity prices support the cheerful outlook for the economic growth in New Zealand, also businesses reported that sales improved in the second quarter, adding to signs that gross domestic product growth accelerated.
The volatility will be seen for the pair ahead of the GDP report expected early Thursday from New Zealand as no data is queued for Wednesday from New Zealand but at 14:00 GMT, the U.S. economy will release the ISM Non-Manufacturing index for June, the previous reading was 54.6 and expected to retreat to 53.5.
AUD/NZD Technical Analysis for July 6, 2011
The AUD/NZD pair fell , and then rose during the hectic Tuesday session. We still have the triangle intact as it looks to close within that consolidation. We still want to see 1.28 or 1.32 gave way to tell us the proper direction in which to be placed.
AUD/NZD Fundamental Analysis for July 6, 2011
The AUD/NZD pair declined for the third straight day, as the dovish statement from the RBA sent Aussie down against most of its major counterparts, despite keeping interest rate steady at 4.75%.
The RBA Governor Glenn Stevens cleared that the outlook for growth is the main focus for the central bank , as inflation will be close to target with gradual increase.
Moreover, the New Zealand business confidence soared in the second quarter as low interest rates and rising commodity prices support the cheerful outlook for economic growth, also businesses reported that sales improved in the second quarter, adding to signs that gross domestic product growth accelerated.
The markets sentiment is rather upbeat as the European crisis jitters ease, supporting high yielding currencies to rebound against their counterparts as investors’ confidence advanced in recent days.
Furthermore, the AUD/NZD pair didn’t change its short term trend and maintained its downside movement, as the cheerful outlook for the New Zealand economy supported Kiwi against Aussie.
Both countries won’t release any fundamentals on Wednesday leaving the movement on the back of the prevailing sentiment and affected by their performance mainly versus the dollar.
USD/CAD Technical Analysis for July 6, 2011
The USD/CAD pair rose on Tuesday, even though the oil markets rose significantly . This doesn’t happen very often, and one would think that the CAD should appreciate because of the correlation. However, the 0.9650 area is crucial in keeping the massive bearishness intact from last week. We like selling rallies under that level.
USD/CAD Fundamental Analysis for July 6, 2011
The USD/CAD pair rose on Tuesday , where rising risk aversion in markets supported demand for lower yielding assets, which boosted the USD against the CAD and pushed the pair higher , meanwhile, rising crude oil prices trimmed some of the USD/CAD pair’s gains.
The United States will come back to focus on Wednesday, as the ISM services index will be released for the month of June, where expectations signal that activities in the services sector eased slightly in June, and further weakness in the services sector could encourage investors to sell higher yielding assets, which will weigh on the CAD and push the USD/CAD pair further to the upside, especially since investors will be eyeing key data from the labour sector later in the week, which is most likely to keep investors anxious.
Wednesday July 06:
Canada will release the building permits for May, which is expected to rise by 5.0%, compared with -21.1% in April.
The U.S. will release the ISM Services for June at 14:00 GMT, and expected to ease to 53.7 from 54.6 in May.
USD/CHF Technical Analysis for July 6, 2011
The USD/CHF pair fell hard on Tuesday, confirming the range being still intact. The 0.8550 area needs to be broken for the bulls to gain any traction from this point. Because of the range, we like selling rallies, as the trend is most certainly down.
USD/CHF Fundamental Analysis for July 6, 2011
On Tuesday trading, the Swiss franc strengthened against majors, including the dollar, on mounting worries regarding the Greek second bailout plan after S&P said on Monday it would consider bond rollover of Greek debt by private sector investors as a “selective default” rating which triggered demand on the franc as safe haven, where the franc remains the favourite refuge to investors due the progress witnessed by the Swiss economy relative to other major economies and due to its proximity to the euro area which is Switzerland’s key market.Still, Greece is the main highlight of the market as last week the dollar pushed the pair up on optimism after the approval of the Greek austerity measures by both Greek Parliament and European Finance Ministers. However, the table has turned around as the franc started to pull the pair to the downside trend that started since June 2010.
Regarding fundamentals, the Swiss economy had no releases while the US economy released factory orders report which rose 0.8% in May compared with the prior 1.2% drop.
On Wednesday as of 07:00 GMT, the Swiss economy will release foreign currency reserves, yet it is not expected to have a remarkable impact on the pair. For the US, MBA mortgage applications report for July 1 will be due at 11:00 GMT, followed by ISM non-manufacturing, as of 14:00 GMT, which will retreat to 53.5 in June from 54.6 in May, according to median estimates.
The main focus will be on ISM non-manufacturing especially after the improvement in manufacturing which showed widening expansion to 55.3 in June from 53.5.
EUR/JPY Technical Analysis for July 6, 2011
The EUR/JPY pair fell in American trading as the Portuguese debt rating were cut significantly. The pair was at the top of a range, so a fall from here isn’t catastrophic, rather looks more like a return to the range again. We looks for weakness, but expect 113.50 to be a floor.
EUR/GBP Technical Analysis for July 6, 2011
The EUR/GBP fell hard as Portuguese debt got downgraded on Tuesday. The pair has fallen back below the 0.90 area, and looks like it is trying to find support down there at the moment. We still think that for the short-term, this pair has a more bullish bias. We are waiting to see if we get a supportive candle on the daily close in order to buy it though.
EUR/CHF Technical Analysis for July 6, 2011
The EUR/CHF fell hard on Tuesday , as the Portuguese debt rating was cut. The candle is long and red, and so is the trend. Because of this, we like the idea of selling rallies again. We never buy this pair, but rather pick strategic places to sell.
GBP/JPY Technical Analysis for July 6, 2011
The GBP/JPY pair rose above the all-important 130 level on Tuesday, but fell back to it, forming a shooting star. This is a bearish sign, and could send the pair lower at this level. We are bearish until the top of the Tuesday range can be broken.
GBP/CHF Technical Analysis for July 6, 2011
The shooting star that formed on Monday broke down on Tuesday, and sent this pair much lower. It looks as if the long-term bearish trend is set to continue as we race towards 1.34 again . We like selling rallies.
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