FUNDAMENTAL :In the absence of any real economic reports except what has been in the limelight over and over again are the Chinese Reminbi or the Yuan being discussed by the US congressmen attack on the currency, its value relative to the US trade deficits, recession and the financial crisis. the continued bashing of the China's policy on the other hand has been an envy for most of the US politicians as the US recovery has been slow from the Jobs data, real estate and contrary to the stock markets performance for the 1st quarter of the year.
Good signs are there for the USD however, as most investors and traders are more focused on the EUR/USD decline as the major factor for the USD recovery and not more of the other way around. These are the fundamentals that has been hanging over the air for sometime now as it is only now that the shift and focus is turning form negative to positive for the USD. The irony of the matter is by then the USD would take a corrective move and the shift will revert back from the previous sentiments. In addition, there are a lot of European funds still caught in between the recent sales of the Euro around the 1.3600 average price levels where some analyst were expecting that the EUR/USD will go back to the 1.2880 as expectations of the European financial crisisled by Greece and Spain's inability to handle their debt problems.
TECHNICAL :
On the technical stand point, keeping an eye on the USDX opening for the week lower from it Friday's close had indicated that the USD may try to finish the 1st quarter ending with a stronger tone with a shortened trading week in the the 1st week of April due to Asia's market holiday closures in trading. The lower opening at 80.50 and a high of 81.08 1st attempt have shown that this would probably happen. It is more defined on the support levels of 79.50-80.05 bp as long as the USDX holds above these levels it is still in an upward trend with minor corrective moves along the way.
This also holds true for the GBP/USD more than the EUR/USD with the EUR/GBP has more influential movement rather than by the individual pair still on a corrective divergence since March 14 which had a technical indicator for this correction. There is a video supporting these analysis which can be found http://youtube.com/megatrade101. The GBP/USD earlier support at 1.4770 may still be valid as a basis ; the 1.3440 was the closest price from our target price of 1.3380 pivotal point for the EUR/USD to recover. Which it is still within the trading range, but now will really depend more on the USDX continued recovery rather than the weakness of the Euro as everyone are focusing on.
Meanwhile, the AUD/USD has slowed compared with the better choice for the NZD/USD which has outperformed the Aussie on the previous two weeks movement. Targeting the 0.9328-32 high respectively and the major resistance of 0.9405. And the NZD/USD 0.7250 initial objective with a possible attempt towards 0.7410 as it 2nd resistance price levels. But both majors are equally at footing as the mid-term trend is still intact for an upward move as Asian currencies are in better a position rather their counterparts.
The USD/JPY is still confined with its weekly trading range and would breakout to the upside after a London shakeout of the long USD/JPY between the next two weeks of this month and the opening of April. Although, there also a possibility that the USD/CHF may take the limelight on this shakeout depending which investors shifts would come first. WE will find out which of these two pairs will likely take the action as we go along the way this coming week.
Good Luck and Happy trading!
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