Forex Investment and Currency Trading

USD/CAD – The USD just melted away last week after tumbling below channel support at 1.0550. The market has bounced modestly so far today, having dropped to just under 1.03 to reach the weakest USD level since early August last year. Traders caution that despite the sharp slide in the USD this month already, significant rebounds are liable to remain absent for the moment; trend indicators are bearishly aligned across multiple timeframes and the USD is entering a period of the year which is often characterized by weakness. The minor intraday resistance is now at 1.0360/70 and there is a good [...]

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Gold has posted a weekly close at new highs and further gains are expected for up to $1,300 over the coming weeks and possibly months. EURUSD has also posted a weekly close above 1.4720 (Dec ’08 high) which is a bullish medium term break even if the market remains choppy in the short term. In other markets we have seen a good hold of support level on U.S. long end yields (30 year, 10 year and 5 year) and expect higher yields going forward. This is leading USDJPY higher and in a general USD bearish environment, JPY crosses are performing [...]

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EURUSD Outlook
Trichet, Fed comments fail to reverse EUR rise
The ECB kept policy on hold as expected and said little to suggest that rates will be raised anytime soon. And although on the currency side Trichet did mention the desirability of a strong dollar, the standard phrasing used did not suggest any real sense of urgency to act on this. A raft of hawkish-sounding comments from the Fed’s Bernanke, Lacker and Hoenig, plus Obama advisor Summers, pushed the USD stronger against most majors in the Asia morning. The message was the by-now familiar ‘rates will have to be raised at some [...]

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USD: Over the shorter term market continues to look for USD to weaken on the back of continued positive risk-sentiment and maintenance of the risk-positive/USD negative dynamic. FX markets have been shifting from listlessness to more of a directional view in terms of further USD weakness over the near-term, highlighted with negative moves against both EUR and high beta currencies like the Dollar Bloc and the Scandies. USD is expected to be strengthening medium term, over 2010, the correlation between risk and USD weakness will fade.
EUR: EUR-USD is expected to break towards 1.50 by the end of the year, as [...]

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