USD Recovers On FED Market Data

The Fed announcement yesterday was not so optimistic about monetary policy meeting ending Wednesday afternoon. The plans announced by Chairman Bernanke in previous meetings remain valid as the U.S. economy is beginning to provide positive figures.

Proof of this is the significant improvement experienced in durable goods orders in September, which, because of its high added value are very important in the running of the economy grew these were 2%, higher than expected by analysts.  At the same time, the Weekly unemployment claims declined slightly, remaining almost in line with expectations.

But the note of the day, positive certainly gave UK’s GDP, which finally seems to emerge from the recession that attacked several quarters. The preliminary measurement of the third quarter of the year showed an increase of 1%, modest, but enough to give sterling a strong bullish momentum, which was mostly in their crosses against the euro and the yen.

The decline in the Yen against the dollar (reached its minimum of four months, exceeding the benchmark of 80 units), gave the cross GBP / JPY strong upward movement, so that peaked on May 5 past.

The euro, however, fails to fully stabilize. Surpassed early in the European session near 1.30, but failed to 1.3030, and from there began a new low, which may extend to the American session. The break of 1.2920 in the early  evening then gave way to a fall  of the single currency to near 1.2830 for the rest of the week and the following Monday.

The other leading currencies seem to take new strength against the dollar, although some noticeable signs of exhaustion in bullish rallies crossings AUD / USD and NZD / USD, which could suffer downward corrections in the coming hours.

It depends, of course, the behavior of the equities markets NSE. For now, the Dow Jones index futures do not provide clear signals, although they maintain a bearish bias ruling on a base 12 960 points, which would break a trend change in the medium term. It seems, however, that today is the day that happens.

EUR/USD

The Euro – Dollar pair, is return by the fractal 1.3005, after falling to 1.2916 yesterday, because the Federal Reserve announced it would leave interest rates and monetary policy unchanged.

Yesterday on Thursday, the pair is trading at a level of two probabilities, the first if you close in 4 hours charts above 1.3005 is likely to be extended upward move to 1.3120, the second, if the pair trades below 1.30 is likely to be a correction to the line of the bullish channel, recommend buying at this level, with targets up to 1.3120.

These last few weeks, since the month of August, this pair operate every day is getting complicated by uncertainty over Greece and Spain, weighing on the euro. We therefore recommend caution and operate with low leverage.

Technical indicators are showing a continuation of upward movement.

(click to enlarge)

GBP/USD

The pound sterling, is very optimistic, after falling to 1.5915 (bullish channel level) now being negotiated by 1.6140, as I mentioned in the  article on Tuesday, we expected a bounce upward, and that was what happened.

At this time, this is a likely break the downtrend line short term, if this line is broken, it is likely to continue the upward movement until 1.63. On the other hand, the downward pressure will continue to increase below 1.6135 (daily fractal), so we can expect a correction of the pair to 1.6010,

You can make the decision to buy or sell this pair, according to the graph shown below. It is important to take into account the fractal 1.6135.

At a fundamental level, Mervyn King, said the Monetary Policy Committee, is ready to add to a new stimulus, since it assesses the strength of the national recovery amid signs of global economic weakness is spreading. For this reason this pair is optimistic, it is likely that for the next few days this trading by 1.63.

The technical indicator is at a level of indecision.

(click on graph to enlarge)

Regards,

Andrew E Martinho, Senior Account Manager