The U.S. Dollar is trading lower at the midsession against most major Forex markets following the release of better than expected U.S. Sales of Existing Homes.
The U.S. Dollar is trading lower at the midsession against most major Forex markets following the release of better than expected U.S. Sales of Existing Homes. This report is another sign that the U.S. economy may be pulling out of the recession.
Last night it looked as if profit-taking in Europe and Asia would drive the U.S. Dollar higher once the New York session opened but the release of the number triggered a turnaround thereby weakening the Dollar once again. The inability of the equity futures indices to break this market through the overnight lows also contributed to the weakness in the Dollar as investors once again sought higher-yielding assets.
The GBP USD continued its upward trend this morning with a test of the 1.70 area. Sellers quickly surfaced which may be a sign that the buying is slowing down at current levels. Although the main trend is up, gains may be limited because of the August 6th Bank of England meeting. Traders are expecting the BoE to leave rates unchanged but to end its asset buyback program.
The EUR USD barely eked out a new high for the current move before encountering selling pressure. This is a sign that traders are nervous at current levels. It could be that demand is waning for higher risk assets because of overbought conditions or nervousness ahead of the August 6 European Central Bank meeting. Nonetheless, look for choppy, two-sided trading until either the uptrend resumes or this currency pair retreats to a key retracement area.
The USD CAD is picking up a little to the upside this morning. Choppy trading in both the stock market and energy complex is leading to indecisive trading. Investors could be becoming concerned about the rapid rise in the Canadian Dollar and its effect on Canadian exports and economic growth.
The AUD USD made a new high for the year after the Reserve Bank of Australia left interest rates alone but hinted that a rate hike is likely should the economy continue to show signs of improvement. Long traders look nervous at current levels which could be a sign that this market is overbought. Watch for a lower close today to signal the start of a two to three day break.