Wednesday, March 17th, 2010
Forex Picks for Pips: Euro Down, Pound Up, Yen Steady
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The Federal Reserve kept downward pressure on the dollar after it kept interest rates stable, while the Euro also fell after very negative comments out of Greece regarding IMF support. Meanwhile, the pound moved up on positive jobs data and the Yen moved down on the BOJ.
EUR/USD
The Euro fell against the dollar early during the session after a Greek government spokesman was quoted as warning his country may seek IMF aid if the EU states do not provide “clear support.” While the off-the-cuff comment is not likely to come to fruition, the markets still sold Euros and bought dollars in reaction to the possibility.
Technically, the EUR/USD trend is still long-term bearish on the daily chart for the foreseeable future, but the hourly chart continues to remain bullish for the Euro, with support at 1.3270 and stronger trendline support at 1.3632. Of course, any significant news out of Europe could quickly reverse the market, making this trade a risky one on either side.
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GBP/USD
The Pound rose sharply against the dollar during the session, after jobs data across the pond came in far more positive than expected. Meanwhile, the dollar saw downward pressure against most other major currencies due to changed risk profile after the U.S. Federal Reserve’s policy statement on Tuesday, which signaled a move towards riskier assets.
Technically, the GBP/USD trend remains bearish in the daily charts for the foreseeable future, but a buy signal was executed in the hourly chart at 1.5062, but the stock hit its first resistance level at about 1.5371, with a second major trendline resistance level at 1.5878. Given the clarity on the Fed’s position, traders can now expect primarily cable-driven news.
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USD/JPY
The U.S. dollar continues to be range-bound in its trading with the Yen, as conflicting reports continue to come out of both countries. The U.S. dollar was kept under pressure from the Fed’s actions to keep interest rates steady, but the Bank of Japan (BOJ) was equally keen on supporting riskier assets, and kept the pair mostly range-bound.
Technically, USD/JPY remains range-bound in the long-term daily charts until a significant breakout, while the hourly chart paints a similar picture. Currently, the long-term range stands between 88.227 and 91.239 for traders looking to scalp, while the hourly range is tighter, standing between 90.035 and 90.805 in the short-term.
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-- Written by Simon Monger
