All eyes on Ben Bernanke's semi-annual Congressional testimony for any clues for the market's direction. However, the earnings numbers are closely being monitored as the stock market have recovered significantly to the high side for the start of the week.
This also signaled some renewed investors confidence despite of the mixed to negative reports on the economy for last week reports. While consumer prices came out as expected signaling that there are no inflationary pressure.
The USDx has continued its mix to lower trading activity as it has re-tested the lower band support at the 83.05 basis point(market view dated: July 11) with an intraday low at 82.91 while currently working at 83.10 as of this writing. Although, the overall trend for the USD is bullish; daily corrective moves are likely to continue and risk of a major correction may occur before with no fresh news that would provide the next leg higher. The technicals on the USD is more correlated with the currency price and behavior of the Euro and the Japanese Yen. Whereas the market's action related to the GBPJPY and EURJPY crosses have moved the market prices to their lower levels not seen in recent months.
The mid-trading day for Tuesday while waiting for Bernanke's testimony have been a little sluggish. The EURUSD and GBPUSD corrective move higher were simply due to the USD correction. While investors shifting to stocks trading during the earnings report have grown more in terms of volume transactions compared to the diminishing volumes and open interest for the foreign exchange market.The Euro would be consolidating in its lower range heading lower for some time before any real serious recovery can be made. While USDJPY and USDCHF would still move contrary with each other on a daily price movement in both directions; whereas the USDCHF would move more in tandem with the USDx.
The price action seen for the past few trading weeks have been obvious that prices have continued its decline for the European majors and crosses but the daily price fluctuation has been volatile in both directions. The trade strategy applied based on July 03 - 17 position trades have been best described with the counter-trades continuing strategies to cover both sides of the market on a short-term basis. Maintaining a net positive net result is always the objective of the trades combined regardless of the next price action in the market after each settlement.
Here is a summary of the trade & Counter-Trade strategies as of July 03 to present:
7.03 Long GBPCHF @1.4883 settled @1.5255 1st (R1) 7.13 +372
7.11 Short USDJPY @79.48 settled @78.82 1st (S1) 7.16 + 66
7.12 Short GBPJPY @123.78 ave. settled @122.88 7.16 + 90
7.13 Short GBPCHF @1.5208 ave. settled price 1.5275 7.17 - 67
7.13 Long GBPUSD @1.5529 settled price 1.5620 7.17 + 91
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