Daily Forex Analysis

[forextrends24]

Today's Forex Analysis summary


The Australian Dollar could be looking at a sharp sell-off as signs are out there that investors are focusing more on the Australian economy than the higher yields offered by the market. Even the stock market rally on Wednesday could not encourage risk hungry traders to go after the higher yielding AUD USD. This is clearly as sign of developing weakness and is likely to trigger further downside pressure as traders are shifting their needs from return on capital to return of capital.

The NZD USD is facing similar issues as the Australian Dollar. With the economy showing signs of weakness, investors know the Reserve Bank of New Zealand has to take action to prevent the on-going recession from deepening and widening. Most traders are calling for quantitative easing or an intervention as the best short-term solution. The RBA may cut rates again since they have room to do so, but the speed of the decline in the economy will most likely counter-act a slow-moving interest rate reduction.

The U.S. Dollar weakened versus the Japanese Yen on Wednesday. Traders were mixed in their opinion as to why the USD JPY fell. Some felt it was caused by flight-to-quality buying because of lingering U.S. banking issues. Others felt that although Japan’s exports were down last month, they were slightly better than last month. This news was interpreted as the start of possible bottoming action.

The Canadian Dollar closed lower today in a volatile two-sided trade. Several times throughout the New York session, the market traded on the plus side only to be met with selling pressure which drove it lower. Traders seemed reluctant to take a major position ahead of an important Bank of Canada announcement report

The news that the U.K. budget deficit would soar to 175 billion Pounds encouraged selling pressure all day in the GBP USD. Technically the daily chart main trend is down.

By ForexHound.com the portal for Analysis, Education and exclusive timely market Gann Analysis

Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.

[Desylina]

I think GBP is side ways trend, range 6600 - 5500

[sofia]

Hi members,

Have you seen the Dollar had another see-saw day, ultimately closing out even after Federal Reserve Chairman Ben Bernanke gave additional comments in front of a Senate Banking Committee on Wednesday as he did a day earlier in the Congress.

Although the remarks were similar, this time he said he is seeing some positive signs in the housing market which was a slight deviation from his remarks on Tuesday when he touched on a depressed real estate market.

Confused and not sure how to react, Forex traders took the Dollar from negative territory into positive territory several times over the course of the day.