Overlay Analysis: EURGBP Cross-EURO vs. USD Index

Confirms: Breakout

To identify a probable breakout is as challenging as ever due to the degree of trading difficulty from the market's reaction. Although, what drives an establish trend is weighed by the current indicators, but more specifically persitent market sentiments that reflects the true price action after the fact. However, major participants and traders with the ability to maintain consistency still has the upper hand contrary to speculative trader/investors to withstand market swings even contrary to their active positions.

In our sequence of market view analysis, we have made mentioned that the USD was one of the best trades before and after the fact. The bullish sentiments and data released favoring the USD rally has provided traders and investors the leverage of finding high probability trades thereafter. Although, going through some analysis most traders had some lingering doubts for the USD to continue its rally after a string of good economic reports trailing the market.

Price action from the earlier highs followed by a slight weakness for the USD indeed provided some market relief which is currently being made. Click here to continue

Perspective: USDCHF - EURGBP Cross Rate

For now, we remain with the current market sentiments provided through our sequential analysis reports until such time a fresh market incentive would appear; when prices moves to their current directional trend.

A considerable market play combination are likewise seen between the USDCHF, EURGBP cross other that the Yen and the Aussie Dollar. As both currency pairs have reacted substantially to the BOJ and the Chinese data thereafter.

FX Market Perspective l

Sequential Trades leading to NFP & Unemployment Data:
On the Fundamental stand point: the doom and gloom reports on job cuts in the news wires prior to today's much anticipated NFP numbers of 146,000 jobs added and unemployment data at 7.7% (lowest since 2008) beating market expectations have finally put most naysayers to silence.

The overwhelming & unexpected data from both reports have benefited the USD and investors risk appetite. Of course, there will always be a contrary and counterpart opinion in all this pleasant reports. Which in fact, only boils down to the Fiscal Cliff and the Fed's policy on whether adding additional asset purchases would continue to boost the US economy. With the news now out of the way, the focus would be the FOMC meeting heading into next week with a better looking labor market report. Weighing market sentiments comes into play once again will head towards how the technicals would paint the charts at the closing of this week's trading.

However, expect some relative corrections...

Market Analysis SRO 12.4

In the absence of any real market changer between the recent RBA interest rate cut within expectations, the ISM manufacturing data and the much anticipated Non-Farm Payroll data, the market sentiments on the GBPJPY, EURGBP & EURJPY Cross Rates reinforced trend remains resilient with the steadier prices still moving north of the charts.

From our closing analysis and insight for the US Dollar Index dated the 30th of November; we have made mention that ..." The key indicator for the opening price gap would dictate the first trading week for December." While the USDx opened lower with a price gap at the first trading day of the new month of December @79.99/00 from a month's closing price last Friday @80.25 basis point have indicated a lower signal for the USD. Which prompted the Euro & Cable prices to swing higher at the ealier Asian trading session towards the European sessions. Although, inbetween sessions, prices have had some minor session pullbacks breathing some false indication of a possible decline. However, these decline in prices are mere corrections and price adjustments that are intended to soften the relative strengths / weaknesses of the current prices related to their corresponding indices. These price adjustments is where changes are likewise made while technical divergences /convergence are created in the same manner that would provide some trade signals along the way. 

And one of the predominant technical traits ...

Identify Trend Analysis

The most common candlestick patterns are complimented by the behavioral price movements, increase and declines in volumes alongside the open interest. Wherein open positions remains unsettled and/or until such time liquidated that changes in open interest provides indication in the next possible trend. These trend indicators can best serve the traders to have an informed analysis based on the parameters provided while making a trading decision. Here is an important short-list or a simple guideline in determining a trend. It is up to the trader to pre-determine whether such trend would be viewed as a near-term trend or mid-to-long term trend analysis.