Good morning. The dollar recovered yesterday after the Fed said yesterday that the economy is weakening. The Fed left unchanged the statement that they would likely hold the rate unchanged, near zero, at least through late 2014 – and left the door open for fresh stimulus. It seems there’s a good chance we won’t see more QE in the next months since election is just around the corner and the Fed doesn’t want to appear political. The market is currently waiting for the ECB at 13:30 GMT, which is today’s major event
EURUSD
Euro declined from the 1.2330 region yesterday in risk-off trade, but it found intraday support 100 points lower, around 1.2230. There isn’t much to do until the ECB press conference.
Market sentiment: intraday – bearish, short-term – bearish
Potential trade strategy: to sell on weakness below 1.2220 or sell on rally to 1.2300/30
EURUSD 4hrs 8-2-2012
Hourly chart:
EURUSD hourly 8-2-2012
AUDUSD
Aussie dollar has weakened, too, but remains bullish on short-term basis. Anyway, selling on the potential break below 1.0440 is tempting, so it’s worth to keep an eye on this support level
Market sentiment: intraday – bearish, short-term – bullish
Potential trade strategy: to sell on breakdown below 1.0440, target at 1.0330
AUDUSD 4hrs 8-2-2012
GBPUSD
Cable lost more than other majors against USD yesterday, so my plan to look for a buying opportunity on the break above 1.5730/50 is on-hold. What’s important now is this support formed by previous higher lows.
Market sentiment: intraday – bearish, short-term – bearish
Potential trade strategy: to sell on pullback to 1.5600/20, target at 1.5400
GBPUSD daily 8-2-2012
USDCHF
Support around .9750 holds and USD pulled back, but the recovery is still weak.
Market sentiment: intraday – bullish, short-term – slightly bullish
Potential trade strategy: none
USDCHF 4hrs 8-2-2012
Have a great day!
