Has the Trend Been your Friend?
Has the Trend Been your Friend?
Overall: The dollar gained in overnight trading as oil continued to trade lower, although price reversed once London began trading. Europe was on holiday for The Assumption, so trade desks were apparently able to move price a bit easier in thinner conditions. Profit taking on recent moves was likely a factor that played into the five hour reversal, although there no reason to believe in a change in trend.
The euro (Euro/Usd) declined against the dollar for a fifth straight week, the first time that’s happened in two years. Mr. Trichet’s view that Q3 will be “particularly weak” is apparently still resonating, perhaps because it implies a greater rate of contraction for the quarter than what was seen during Q2.
The cable (Gbp/Usd) continued to decline, although it looked to close about 1 cent above the daily low which was made just as London began trading. That level correlated with support from September 2006, a break and daily close below which may open the way towards $1.80.
The aussie (Aud/Usd) declined in overnight trade, but successfully defended 86 cents on the dollar. The aussie is set to post its fourth week of decline, a losing streak not seen since October 2006, after reaching a 25 year high just one month ago.
The cad (Usd/Cad) looks set to make a weekly gain on the dollar after government reports showed the trade surplus widened and manufacturing shipments increased more than forecast, news that likely to temper speculation on the BoC making an interest rate cut at its September 3 meeting.
The swissy (Usd/Chf) also looks set to complete its fifth week of declines against the dollar, a run which has seen it lose 9.6% in value to the greenback.
The yen (Usd/Jpy) looks to finish the week with a very slight decline, as the S&P is also looking to close its week virtually at where it started.
Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com
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