Major Correction within a Major Trend

Corrective movements are prevailing the forex market amongst the major currency pairs including the cross rates. As this is part of the statement from our previous analysis, that a major corrective movement should not be discounted within a major trend. A price reversal as we call it but definitely not a trend reversal.

The EURUSD corrective moves lower is influenced more on the fundamentals related to the Irish downgrade and on a technical note is now out of its overbought areas along with the rest of the currencies across the board. Interest rates hike is still looming in the air for the ECB to continue it intentions raising rates sooner than later. However, the contrary analysis for the daily prices to move lower for the European currencies are now in effect. Although, we do anticipate it to be short-lived. The 1.4520 levels is just the initial resistance ideal for the correction, alongside with the EURGBP's 0.8770 low to be stable and a good support price for the cross rate. Risk factor is minimal with a -100 pips tolerance level but rather substantial for short term main street investor to trade long for a position. While the GBPUSD tries to recover from its corrective moves sooner than we expected.

Meanwhile, the influence of the EURJPY is weighing in more on the continuation of the upward trend for the EURUSD as it pulls-back in line with the USDJPY currently working at the 82.55 levels alongside with the USDCHF at the 0.8929 levels. The EURJPY looking at its 1st attempt back to the 116.00-50 area levels, as the technical spike candlestick formation weighed heavier. As of the moment this a a technically motivated market. The same goes with the GBPJPY.

The corrections on the USD led to this movements as some good reports came out fromt he US slight recovery in spite of the surrounding conditions. As the trading week is gaining closer to the month closing expect some wild fluctuations on both directions but we do remain firm on our analysis until the 22nd and a spill-over effects towards the 27th of April, 2011