Spillover on Crosses
Figures on German unemployment were better, the upcoming US and European data on consumer confidence and Non-farm Payrolls may find some friendlier support for the US dollar this short trading week schedule. Although, mix to negative may prevail for housing and US consumer confidence due to the continued oil and gasoline prices currently hurting most American consumers.
Apparently, the fundamentals on the European sovereign debt problems have eased-off. As European leaders have made their stance clear on providing a second package deal for the Greek problems that would eventually lead to Greece meeting its scheduled payment options without the restructuring program.
But the main headlines of Japan being downgraded have a more direct effect on the crosses rather than that of the USDJPY with only a meager trading range and working at 81.69 as of this writing. the obvious seems to unwind other major traders to checkout the crossess as they have more market potential with accompanying volatility as seen on the prices of the GBPJPY & EURJPY.
However, even without such reports from last week's price movements, the strength of the Euro & Pound have made it clear that the actual market sentiments on these pairs were still bullish. Pushing higher to the 1.4406 levels for the EURUSD and 1.6545 for the GBPUSD respectively, has maintained its consistent market momentum thus far. This also included the price reversal for the EURGBP cross rate to change its tone from a low of 0.8610 trend line support. A confirmation from the daily candlestick inverted hammer of 5.26 also lent support for the directional price change that is now signaling a continuing upward price movement.
The spill-over sentiments carried through the EURJPY & GBPJPY crosses as the upward momentum increases for the start of a shorter trading week. EURJPY is currently at the 117.45; while the GBPJPY is at 134.96, a clear breakout from the 133.20 levels. Expect some pullbacks along the way.
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