Diminished demand for higher risk assets is putting pressure on most major Forex markets at the mid-session.
Diminished demand for higher risk assets is putting pressure on most major Forex markets at the mid-session. A few of these markets moved up with equity markets early this morning and are now facing potential reversal formations that may be signaling the start of short-term corrections.
The AUD USD rallied to a new high for the year this morning but failed to attract enough buying to maintain its gains. Weakness in the equity markets is drawing money out of the higher yielding Aussie. The current chart formation suggests a reversal top will form after a close under .8223.
The strong rally in the NZD USD overnight may have trapped traders who believed the rally would continue following a slightly better equity market last night. Once the anticipated stock rally failed to materialize, this market quickly turned sellers which could trigger a reversal top on a close under .6564.
The USD JPY is under pressure today because of weakness in the equity markets and the end-of-the –month repatriation of profits by Japanese corporations.
The GBP USD is down at the mid-session and showing signs that it wants to work lower. Support at 1.6362 is holding the market at this time. A break under this price could help accelerate the market to the downside. Furthermore, lower-lows will form a secondary lower top at 1.6585.
The failure to breakout over the last swing top at 1.4337 is beginning to indicate a possible double-top formation in the EUR USD. A break under the last swing bottom on the daily chart at 1.4119 will turn the main trend down.