GBPUSD Takes Leadership Baton From Carry Pairs
Lower US Retail Sales Knocks Carry Back while GBPUSD Asserts Leadership to Up-side
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With many analysts calling for a positive U.S. Retail Sales release, carry pairs and stock indices sold off on the -1.1% drop with EURJPY turning its current trend on the Daily chart lower. The Yen strengthened against the Greenback also, but its GBPUSD which looks to be benefiting the most from both its current bullish stance on the Daily chart and today’s weaker U.S. Dollar. A close above 150 for GBPUSD opens the door to a technical break-out and a Monthly trend shift to the up-side.
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China & the Commodity Currencies
China is back on top of the global news heap with talk last week that their stimulus plan will lead to 6%+ growth this year. The idea that growth could pick up that fast In China may surprise many Western economists, but the memory of that countries demand for commodities is still fresh in the minds of the business men who brokered those deals. Recent price action in the commodity currencies, the Australian & Canadian Dollar, confirms there is still plenty of demand out there, with our indicators showing higher immediate trends on the Daily and Weekly time frames for both currencies against the U.S. Dollar.
Euro Still the One to Avoid
The Euro is still a questionable trade following March’s activity when rumors first swirled about the liabilities of European banks, and re-swirled about intervention in favor of the Euro following the last U.S. FOMC meeting to drive out short-sellers in an effort to stabilize those same banks. We prefer to avoid trading in a market with such a dangerous back-drop.
Jay Norris
DISCLAIMER: Futures, options and Forex (off-exchange foreign currency futures and options, or “FX”) trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, options and Forex may fluctuate, and, as a result, clients may lose more than their original investment.