Coming Up Today
- UK Public Sector Net Borrowing
- Canadian CPI
- Fed Member Lockhart Speaks
Not a whole lot going on today as the markets continue to look for direction after last week's risk rally. Overall. not much has changed since last week's FOMC Meeting. In fact, it can be said that risk sentiment has actually risen with the Bank of Japan joining the party and increasing its own monetary stimulus plans. As such, with riskier currencies in the forex markets seeing weakness this week, we appear to be in a period of profit taking after the previous run-up.
Looking forward, forex traders may want to keep their eyes on EU sovereign debt yields, specifically those of Italy and Spain for an indication of whether the "good times" are set to continue or whether the longer term risk adversity theme is still in play.
Charts to Watch
EURCHF: Nothing new has occurred in the EURCHF but it continues to find support on any of its dips. Whether this is a precursor to another move higher remains to be seen, but it does indicate that buyers (SNB or someone else) are stepping up from their previous 1.2000 level.
GBPUSD: The GBPUSD is showing its resilience by shaking off yesterday’s weakness to trade back towards it week highs this morning. The return to its previous highs contrasts to other forex pairs such as the AUDUSD, EURUSD & NZDUSD that are still well off of their previous best levels of the week. As such, if the pair manages to trade and hold above 1.6275, it could lead to further bullish momentum to start next week.
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