Forex Investment and Currency Trading

The USD hovers near record lows versus major currencies, with little prospect for near term improvement. While recent Fed actions may help to stabilize financial system concerns, there are increasing signs of US economic weakening. The Chicago Fed National Activity Index has fallen to levels normally associated with recession, and additional FOMC easing
is likely to push the USD index to new record lows during 2Q 2008.
Residual economic momentum and stubborn headline inflation suggest stable ECB policy through at least the next few months. Strong interest rate support has helped push the EUR TWI (BoE index) to within 1% of its October [...]

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US Markets Today:  Core PCE inflation year-over-year fell to 2.0% in February, helped by revisions to prior data, moderating fears that the Fed is erring in easing policy and risking sharply higher inflation. Nominal consumer spending advanced 0.1% in February, but spending was flat in real terms, suggesting slow real GDP growth in Q1. Personal income rose an above consensus 0.5% due to both a calendar quirk and the BEA’s aggressive assumption that “large bonus payments” added $15bn to February personal income. In its March final reading, University of Michigan Sentiment fell to 69.5, the lowest level in over 16 years. [...]

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EUR/CAD: Double Bottom at 1.5997
The formation of a double bottom at 1.5997 has lent support to the bullish outlook for the cross. This level is expected to attract continued buying interest - with an hourly close above nearby resistance at 1.6090 confirming the bullish implications of this pattern, targeting 1.6148 and 1.6183. Place stops below 1.5935 on an hourly closing basis.
GBP/CAD: Stop Loss Hit Below 2.0334 – But Staying Bullish
The overnight selloff in GBP/CAD has just triggered the stop loss below 2.0334. However, with the hourly studies reaching oversold levels, bullish view is retaining. Support at 2.0281 and a triple bottom at [...]

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USD/CAD remains trapped in a 1.0100-1.0200 trading range overnight.
Interest to sell CAD on the crosses offset by corporate offers in USD/CAD.
USD/CAD will have to close below support at 1.0112 resistance at 1.0224 in order to generate new short-term directional bias.
Overnight Spot Trading Activity: Range Bound Ahead of the Weekend
Asia: USD/CAD remained confined to a 1.0100-1.0200 trading range overnight as sales of CAD on the crosses were offset by corporate interest to sell USD/CAD. There were no significant deal flows noted in Asia, with yesterday’s North American rejection of resistance at 1.0224 (high 1.0215) causing a slow drift down from the [...]

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