The Dollar is trading steady to better this morning. Thelack of economic reports today will mean investors will turn there attention tothe Euro. The Dollar is trading steady to better this morning. Thelack of economic reports today will mean investors will turn there attention tothe Euro.
The recent flow of money back into the Euro can best bedescribed as a minor shift in risk sentiment and its rally looks corrective innature. Now that the Euro has weaseled its way back to an old top, investorsare approaching the rally with caution as they wait for a shift in thefundamental outlook for Europe to be the newcatalyst which drives it even higher.
Some analysts are beginning to question whether the marketis being driven more by a lack of bad news than any real stream of good news.If this is true, then fundamentally and technically, another move down may bein the works.
Technically, the Euro is still in a downtrend, but rapidlyapproaching a change in trend to up on a move through the last main top at1.2453. The daily chart indicates 1.2609 is the next likely target on June 22nd.
The GBP USD broke out over a 50% price level at 1.4810. Thechart pattern suggests that a move to 1.4947 is likely over the near-term, butsellers stepped in this morning to kill the momentum. The current rally istechnically driven. Fundamentally, employment and inflation are still majorconcerns in the U.K.The main trend is up on the daily chart, but this market is showing signs ofrunning out of steam inside of the retracement zone at 1.4810 to 1.4947. Theintraday pattern suggests that a closing price reversal is possible.
The AUD USD traded higher overnight, but the rally seems tobe laboring as the market approaches a major 50% price level at .8727. Watchfor selling pressure to begin at this price level. Weaker equity markets couldbe the catalyst which triggers a near-term correction. The daily chartindicates that .8377 is the first potential downside target.