Coming up Today (All Times GMT)
- CAD GDP (13:30)
- NZD Labor Cost Index (21:45)
Opening the new week, all eyes continue to be on Egypt. On Friday, the unrest caused Oil Prices to soar as traders worried that the key Suez Canal shipping corridor could get obstructed and cause supply concerns. Also, safe havens caught a bid as traders exited riskier currencies going into the weekend. Specifically, Gold was $30 higher to 1340/oz as short sellers got squeezed on the move, while the dollar and yen both moved higher against major currencies.
Looking ahead, there are two main scenarios that Forex traders will be watching. A quick resolution to the events in Egypt could propel traders to dump safe havens and jump back into the risk trade. On the other hand, if the troubles appear like they will last, it could trigger more Forex participants to trim their positions and head to the sidelines. Traders should keep their eyes on last week’s lows as a move below those levels could cause additional weakness.
EURUSD : The EURUSD was a big loser on Friday; however it did find support around the 1.3600 figure. 1.3600 was the level that it had rallied from last week. Therefore, if the pair closes above this level it could signal that demand continues to be strong in the Euro. The Euro continues to be attracting buyers, as successful EU sovereign debt sales have eased concerns about the Euro zone’s stability.
GBPUSD : Following last week’s poor UK GDP figures, the GBPUSD has been trendless, with several spikes to both the down and upside. This trading action could continued over the short term as Forex traders await more economic data to determine the next trend in the GBPUSD. Until then, the GBPUSD has strong resistance just above 1.6000 with support at 15750 and 1.5820.
Support/Resistance 1.5760,1.5820/1.6000,1.6055
