FX vulnerability

As the market absorbed the news in UK consumer confidence basically remaining unchanged and did little effect on the directional trend lower for the EURUSD from its high of 1.2400 down to the 1.2150 with slight recovery at the present price of 1.2233 as of this writing. the German unemployment which fell lower had neither a real effect as the diminishing risk have marked down as volumes also deteriorated. There is no significant sign of a price reversal for now from the last time it touched the 1.1875 since the week of 6-06. However, that was a good correction as we called it a temporary price reversal , short-lived held true.
Although, the contrary behavioral pattern between the GBPUSD vs. the EURUSD is quite obvious and has indicated that investors had shift hedging strategies from the USDJPY and the USDCHF. With GBPUSD making a high at the 1.5127 and a higher low at the 1.5005 indicating that it still has legs to move higher. while the EURUSD moved lower to 1.2150.

As both Yen and Swiss franc has been in line with the correction of the USDX which made a hold at the price level that we have mentioned in our market view analysis marking at 85.20 low and a swing back higher is what it has been doing currently working at the 85.93. With the USDJPY at the low end of the levels at 88.63 and the USDCHF at our targeted price levels at 1.0820 which happens to be slightly below its Fibonacci retracement level of 50% from the lowest level of .9910 last Nov. 2009 and its recent high of 1.1730 registered last May 2010 No significant changes in the outlook so far.

As some may have noticed that the market view and analysis varies but more often hold our bearings for at least on a medium term basis. Remember, that percentage trading can be your advantage as the market is quite vulnerable to it up and down swings which happens to be good for short term scalpers in the market and day traders.

This goes without saying that the AUDUSD and NZDUSD has made the same where both currency pairs have shown its weakness as the Aussie is currently working at the 0.8526 giving back half of its gains for the past couple of weeks. And the Kiwi has done exactly the same at 0.6925 from its high of 0.7145 and from its previous low of 0.6572 barely three weeks ago which made a quick recovery when it touched those prices.

The overall outlook specially for the precious metals like Gold has made some good corrections lower from the first 2 days of the week that a possible price reversal was in the making however, the bigger picture frame still holds significant legs for some new highs in the near term. But do not discount the possibility of market swings lower as the daily shows some possible exhaustion as lower volumes and profit taking are being made by institutional investors and hedge fund traders.

For now the technicals may prevail over the market as reports are being brushed aside as risk appetite are slowly emerging but our analysis is that the market movements are simply in wait and see attitude as the coming market holiday of the 4th of July is giving some investors and traders that holiday good feeling.

Good Luck and Happy Trading!