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Carry trades and risk taking are returning to the Forex market. The EUR/AUD, a widely used currency pair for carry trades, fell over 250 pips yesterday, slipping from 1.5000 to around 1.4750. Gold continues to rally, while Oil prices broke out of their slump to rise 4.0%. The OECD recent statement has certainly helped move the markets. The international organization announced that it does not foresee the occurrence of a double dip recession; however, remains concerned that bank finances around the world continue to be vulnerable
Up ahead, economic news is light today; therefore, conditions remain optimal for weakness in safe haven currencies such as the Dollar and Yen, with increased momentum towards to riskier currencies.
EUR/USD
Renewed debt concerns about the Euro-Zone continue to strain the single currency. In overnight trading, the EUR/USD slipped to fresh low of 1.2153, trading just a few pips above the 4-year low it hit last week. However, the highly traded pair has since recovered, and managed to touch on a high of 1.2275 in this morning’s Asian session. Nonetheless, EUR/USD sentiment remains fairly negative which may limit any additional advance in the pair to its 1.2350 resistance.
Support/Resistance 1.2145/1.2350
GBPUSD
The GBP/USD seems to be strengthening, as the pair successfully bounced off of its 1.4250 support several times over the last seven trading days. The Pound’s recent movement against the Dollar suggests that demand for the pair could be rising. If it continues to trade out if its 1.4250/1.4500 trading range we may see a breakout to the upside occur.
Support/Resistance 1.4250/1.4510
Written by Finexo.com
