Forex trading EURUSD strengthens, could revisit 1.3900 if we the move is committed, we could see a move to the 1.3850 area for a double bottom.
Forex day trading course EURUSD
FX markets were choppy in the Asian session but little changed, as traders await a slew of economic data and events.The NZD/USD was range-bound between 0.710-35 range for the early part of the session, before risk was sold off as concerns over Chinese banks and worries over European Commission assessment of Greece’s deficit-cutting plan spread. Markets become temporarily risk averse, as news that Fitch Rating warned that banks in China faced the greatest “bubble risk” of any Asian country. “The agency views ‘bubble risk’ as greatest for Chinese banks given their 32 percent loan growth in 2009; this looks likely to be followed by a further 20 percent in 2010,” Fitch said in a statement. The USDJPY had climbed to 90.58, but fell swiftly to 90.30. A day after the RBA shock the market by holding rates at 3.75%, Australian trade deficit widened to A$2.25bn vs. -A$2.5bn exp in December from A$1.7bn in November, illustrating a strong recovery in both imports and exports. We still believe the RBA will hike in March and AUD should be well supported near term.
The highlight of the day should be the EC assessment of Greece’s deficit-cutting plan, and then European Union Economy and Monetary Affairs Commissioner Joaquin Almunia will hold a press conference. We doubt that EC officials will want to fan any fears and cause Greek spread to widen further. However, a large portion of the problem is credibility which is hard to regain with rhetoric and empty strategies. On the straight economic data front, Final PMI surveys in the Eurozone, Germany and France are scheduled and no revisions to the earlier flash estimates are expected. Eurozone retail sales is expected to print a monthly gain of 0.4% m/m, which should be mildly positive for the EUR.
The Norges Bank is expected to keep rates on hold at 1.75% at this meeting, after raising rates at the previous two consecutive meetings (the last on 16 Dec). After the surprise hike of 25bps the last time around that caught many analysts wrong-footed, there is certainly a possibility that the consensus may have underestimated the Norwegian economy once more; recent retail sales figures have been strong at 1.1% MoM, and PMI data for January at 50.1 was also indicative of further improvement in the economy. Nevertheless, we would align ourselves with the majority in believing rates will be kept on hold this month; consistent with the prediction offered by the Norges Bank Deputy Governor in December that he expected rates to be at 1.75% in March, and also compatible with the rationale that the Executive Board will want to see the contents of the next Monetary Policy Report published on 24 March before deciding on further tightening.
