Market Review: Another Mixed Session For Forex Traders - Mar 11 10 10:27 EST

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Market Review:

Another Mixed Session For Forex Traders

In the daily market review with TheLFB trade team, Dan Cook, Snr Market Analyst at IG Markets, looks at the impact of a slow fundamental week. Catch Dan, and TheLFB trade team on ForexTV Live.

EUR/USD – It has been a mixed morning for the EUR/USD pair as they hold near the top of the channel we have been discussing the last few days. Through the European session the continental currency was gaining steadily against the US Dollar; however, once again a combination of technicals and fundamentals pushed it back from the top. On the fundamental side, a favorable US Trade Balance report which showed the import/export gap had shrunk to $37.3 Billion helped stop the fall of the Dollar.

Interestingly, the initial reaction on this news was Euro strength; however, once the EUR again pushed toward the psychological barrier near 1.3700 it was repulsed in a swift move back. As of this writing it has been basically a draw between the EUR and USD over the last day with a very small edge to the Euro.

GBP/USD – Sterling started the UK trading session climbing versus the Dollar after spending the previous 14 or so hours bouncing along between about 1.4950 and 1.4990. Once this tight channel broke to the upside it was a nice run for the GBP. Helping to cause this break out was a tick up in the UK Consumer Inflation Expectations which moved to 2.5% after being stuck at 2.4% since June 2009. Heading into the US trading day; however, the Dollar has taken back some of the earlier losses.

The recent dollar strength can be primarily attributed to the positive US Trade Balance data. While this was a Dollar positive report, the shrinking gap was only caused because imports fell more than exports not because exports had actually improved. We saw this phenomenon a lot last year and so the impact of this report will likely be short lived. As of this writing the Dollar has reclaimed 61.8% of the earlier losses and now resides directly on what may turn out to be Pound support which was the top of the previous channel.

AUD/USD – Up and down with very little change has been the story of the Aussie and US dollar pair today. After initially falling on an Employment Change report which failed to even come close to expectations (15.2K expected, 0.4K actual) the AUD came back strong later in the Australian trading session. As with most majors, with exception to the Yen, through the later part of the Australasian session and through the midday of the European trading days, the US dollar was losing strength.

As with the other pairs the Dollar took back most of the ground lost, or in the case of the AUD, all of the ground lost earlier. As of this writing the AUD/USD has bounced off of the area near .9110 a couple of times since this report. This area a few pips just above the level of .9110 has been tested several times as support since breaking above it on March 9. It will be interesting to see if the US dollar can break through or if one more bounce will reinstate the flow of the uptrend previously seen for the Australian Dollar.

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