Market Update - EURUSD Rallies, AUDUSD Slips

Today’s News

• Canadian CPI
• University of Michigan Consumer Sentiment

The EURUSD firmed yesterday after German Chancellor Angela Merkel's reiterated her support for ECB President Mario Draghi's vow to do “whatever is necessary to save the Euro.” On the news, the EURUSD rallied from 1.2260 early yesterday to a current high of 1.2370. Interestingly though, the EU news spilled over to the global equity market which saw gains in prices. However, riskier currencies such as the Aussie and Kiwi have been trending lower. Elsewhere, the GBPUSD continues to hold above 1.5700 as it trades near its 1.5750 long term resistance.  Charts to WatchAUDUSD: The risk rally that is triggering gains in the Euro, Pound, Commodities, and Equities hasn’t left its mark on the AUDUSD. As seen in the chart below, the pair is nearing the 1.0400 figure where it saw support earlier in the month. As such, a break below this figure could lead to selling pressure intensifying.  

  EURUSD Bounced off 1.2250 support yesterday on the above mentioned Merkel news. Looking ahead, to confirm that the rally has legs, we will need to see the pair trade and hold above 1.2400. Such a move would reveal that demand is stepping up in the pair and that yesterday’s gains weren’t only triggered by short covering.