euro staged a broad recovery during yesterday's trading session, as the
combination of a positive German ZEW Economic Sentiment and smooth Spanish debt
auction generated risk taking in the marketplace. Turning to today, traders
will want to pay attention to the British Claimant Count Change, scheduled for
08:30 GMT. The report is the official unemployment statistic for the UK and has
been known to generate market volatility. Should the figure come in higher than
forecasted, risk aversion may return to the market place.
Dollar Turns Bearish vs. Riskier Currencies
Risk Taking Leads to Euro Gains
Aussie Sees Upward Movement
Oil - Crude Oil Hits 3-Day High
Market Trends – 18 April 2012
USD - Dollar Turns Bearish
vs. Riskier Currencies
batch of positive international news releases yesterday led to US dollar losses
as investors shifted their funds to riskier assets. A better than expected
German ZEW Economic Sentiment and Spanish debt auction led to gains for
currencies like the EUR and AUD against the greenback. Meanwhile, a positive US
Building Permits figure helped the dollar recoup some of its recent losses
against the Japanese yen. The USD/JPY gained close to 40 pips during the European
session to trade as high as 80.76.
Turning to today, a lack of news out of the US means that any fluctuations the
dollar sees are likely to be due to international indicators. While news out of
the euro-zone was largely positive yesterday, analysts were quick to say that
the real test for Spanish debt is likely to be Thursday's long-term bond
auction, which is not expected to proceed as smoothly. Should worries about the
euro-zone debt crisis resurface today, investors may revert to safe-haven
assets, which could lead to dollar gains.
EUR - Risk Taking Leads to
fundamental indicators helped the common-currency stage an upward correction
throughout yesterday's trading session. The German ZEW Economic Sentiment
unexpectedly came in at 23.4, well above the forecasted level of 19.7 and
signaled that the euro-zone's biggest economy continues to grow. In addition, a
smooth Spanish bond auction helped ease fears regarding Spain's ongoing debt
problems. The EUR/USD moved up some 85 pips during European trading before
staging a slight downward correction. The pair eventually stabilized around the
Despite the positive news released yesterday, traders will want to note that
the euro-zone is still in a very fragile position and the euro's gains may not
last. The real test of how bad Spain's debt situation is will take place
tomorrow when long-term bonds are auctioned off. Analysts are warning that the
long-term bond sale is likely to be significantly more difficult than yesterday's,
and could result in steep euro losses. Today, traders will want to pay
attention to any announcements out of the euro-zone, particularly with regards
to Spain. Negative data could result in increased risk aversion, which could
weigh down on the euro.
AUD - Aussie Sees Upward
Australian dollar saw healthy gains vs. both the Japanese yen and US dollar
during trading yesterday following the release of positive euro-zone and US
news. The increase in risk taking caused the AUD/JPY to spike close to 100 pips
during the European session. By the evening session, the pair was trading at
83.85. Meanwhile, the AUD/USD was up over 90 pips for the day, and peaked at
Turning to today, AUD traders will want to pay attention to any announcements
out of the euro-zone which could influence risk appetite. Additionally, the
British Claimant Count Change could generate some market volatility when it is
released at 8:30 GMT. The figure is forecasted to come in at 6.6K, which if
true, would signal a drop in unemployment claims from last month and could lead
to gains for riskier assets like the AUD. That being said, a higher than
predicted result may cause the AUD to give up some of its recent gains.
Crude Oil - Crude Oil Hits
price of crude oil spiked throughout yesterday's trading session, following the
release of positive euro-zone data which led to an increase in risk taking. Oil
also benefitted from a better than expected US Building Permits figure, which
investors took as a sign of increased demand in the world's largest energy
consuming country. The commodity peaked at $105.47 a barrel during European
trading, up well over $2 for the day.
Today, oil traders will want to continue monitoring any developments out of the
euro-zone which could impact risk appetite among investors. Furthermore, the US
Crude Oil Inventories figure is scheduled to be released at 14:30 GMT. Analysts
are forecasting the figure to come in at 1.6M, which if true, could be taken as
a sign of higher demand in the US. In such a case, oil may be able to extend
its bullish run.
daily chart's Williams Percent Range has entered the oversold zone, indicating
that an upward correction may occur in the near future. That being said, most
other technical indicators show this pair range trading. Taking a wait and see
approach may be the wise choice until a clearer picture presents itself.
indicators on the weekly chart show this pair range-trading, meaning that no
defined long term trend can be determined at this time. The Williams Percent
Range on the daily chart points to possible bullish movement in the near
future. Traders may want to go long in their positions for time being, but
beware of any sudden downward corrections.
bearish cross appears to be forming on the weekly chart's MACD/OsMA, meaning
that downward movement could occur in the coming days. Opening short positions
may be a wise long term strategy, but traders will want to watch out for any
minor upward corrections.
narrowing of the Bollinger Bands on the weekly chart indicates that this pair
could see a price shift in the coming days. Traders will also want to note that
a bearish cross appears to be forming on the same chart's MACD/OsMA. Should the
cross form, it may be a sign of an impending downward correction.