FX Confirms Price & Trend Reversal

The catalyst igniting the USD rally for investors flight to quality investments and position adjustments were simply derived from the EU crisis where its ripple effects on the stocks, combined with the political rampaged of protesters fueled the EURO go move much lower than most have expected. However, the mixture of reports from the US side didn't do much to help from the start. That is why we have mentioned before that the market's condition and behavior has been more on the fundamentals on the EU sovereign debt crisis again that has been taken the limelight from the market.

Although, the yellow metal has had a roller coaster ride from its low price levels of USD1,510 - 1,540.00 trading range adding to the turmoil of the market participants. Especially with the recent report from the COT whereby a majority of open interest for long Euro may obviously been scrambling towards the exits as prices continued to move lower back down to the 1.4180 and 1.6180 respectively for the GBPUSD.

Meanwhile, the USDX has garnered enough momentum from its recent correction of 74.38 and is currently at the 75.50 bp as of this writing. True enough, the price reversal was indeed the first signal where the initial bottom for the USDX is now at the 73.15 -74.20 range levels called from our recent market view analysis dated the 07th of June 2011. And this was initiated with a speculative trade short on the EURGBP and GBPUSD. Simultaneously, hedged with along USDCHF at the 0.8378 levels. this has been a strategy to be able to maximize the market's potential on both directions of the trade. Although. a bit more expensive to maintain as increasing risk appetite were made based simply on a pre-calculated risk factor where the USD was too close from its all time low levels. Please refer to market view analysis dated on the above date of the 07th of June for a complete report on our website.

Do expect that the rest of the week's trading towards the month end would be a bit more favorable for USD bullish players with wider fluctuations for the currency pairs from hereunto. A long as the USDX would maintain its levels above the 75.05-50 basis points plus other fundamentals favoring a flight to quality position trades against the Euro then expect a build=up of momentum, increase in open interest and volumes in the next few weeks of trading activity. Of course, there will never be any real guarantees whenever one deals with the volatile currency market. Exercise caution and sound financial advise before taking such risk.