Wednesday, July 28, 2010

Forex Markets Wrestle With Fair Value

Separation on the major pairs was once again in play overnight Tuesday as a fair reflection of a trading arena wrestling with fair value that changes as each regional market opens and closes. A quiet economic calendar awaits Tuesday, and the dollar may gain some near-term ground unless volume and momentum quickly pick up.
More on Currencies
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The Australian dollar maintains the bullish outlook that has supported the pair since the break of the 200-day simple moving average at 0.8950; only looking to buy the dips here. The Canadian dollar looks strong against the U.S. dollar and once the 100-day SMA at 1.0290 is closed under on a daily chart the automated orders may test 1.0200; only looking to sell resistance.
The yen lost ground to the U.S. dollar with a solid break of 87.10 that could be the start of a move higher towards 90.30; only looking long on dollar/yen in the mid-term.
Forex Shakers
The Swiss franc trade absorbed what looked like institutional intervention that reversed dollar/Swiss franc off 1.0450 support. Not looking to trade swissy, just looking for guidance from the pair as to overall market sentiment. The pound and euro are stuck at resistance with the path of least resistance being lower unless volume and speculative interest increase soon.
Global Risk and Demand
S&P trade is trading above the 200-day SMA area at 1105, and will signal a positive stance if 1110 is held above on a weekly chart close. Crude oil traders are holding support on WTI at 78, with a weekly close anywhere above 77 signaling a bullish undertone for global demand markets.


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