Forex Market Technical and Fundamental Recap
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Today's Forex Analysis summary
The EUR USD recovered from early selling pressure but still closed lower for the session. Traders were selling the Euro overnight and seeking the safety of the U.S. Dollar after it was reported that North Korean tested an underground nuclear bomb and launched two missiles.
Technically, the main trend is up with a retracement zone at 1.4184 to 1.4621 the next upside target.
The GBP USD recovered after an overnight setback triggered by uncertainty regarding an underground nuclear test and the launching of two missiles. This market turned around however following the release of a better than expected U.S. Consumer Confidence report. This report weighed on the safe-haven status of the Dollar. Traders now have the retracement zone at 1.6085 to 1.6694 in sight.
Renewed appetite for higher risk assets helped drive the USD CAD lower on Tuesday. This pair is now rapidly approaching a major retracement zone at 1.1059 to 1.0586. Watch for profit-taking or at the least a technical bounce once this level is penetrated.
Look for the USD CAD to continue to trend lower. As the U.S. economy shows signs of improvement, pressure will mount on the safe-haven status of the U.S. Dollar.
The USD JPY finished the day on the upside after posting a minor daily reversal up. Traders seemed a little hesitant to drive this market through a major 50% support level at 94.263 and a major bottom at 92.529.
Despite assurances from the Bank of Japan last week that it was not considering an intervention, traders seem to be concerned that excessive upside volatility in the Yen may trigger some bearish response from the BoJ even if it is not an intervention.
Traders kept upside pressure on the USD CHF throughout the day despite the better than expected U.S. Consumer Confidence report. The recent rally in the Swiss Franc renewed concerns that the Swiss National Bank would intervene if valuations got too high.
The charts indicate that this market is caught between a pair of important retracement prices at 1.0973 to 1.0660. The trend is down, but could begin to strengthen if 1.0973 is regained.
The AUD USD shrugged off early weakness and closed higher while remaining on path to test a major retracement zone at .7928 to .8382.
The overnight weakness was caused by an increase in trader aversion to risk after North Korea launched a pair of missile tests as well as an underground nuclear blast. This news caused shockwaves throughout the Pacific markets late Sunday which spread across the globe throughout the trading sessions.
The NZD USD continued to surge to the upside as investors ignored possible bearish news and uncertainty regarding the New Zealand economy and instead chose to focus on the desire for higher yielding assets.
Based on the higher close near the high of the day, it’s difficult to say that traders were nervous today about tomorrow’s budget report. Looking at the price action, selling pressure is not likely to surface until a resistance zone at .6553 to .6945 is tested by the end of the wee
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