The U.S. Dollar istrading mixed against most major currencies with the exception of the CanadianDollar and New Zealand Dollar.
The U.S. Dollar is trading mixed againstmost major currencies with the exception of the Canadian Dollar and New ZealandDollar. Traders seemed to shy away from riskier currencies throughout the daydespite a stronger equity market. Some of this weakness can be attributed toend of the week profit-taking, but many traders believe confusion over whetherto follow the economic reports or the bank stress test rumors is encouraginginvestors to pare positions.
The USD CAD was a big loser today. TheCanadian Dollar strengthened earlier in the session when the governmentreleased a better than expected jobs report for June. This news is a strongsign that the Bank of Canada will raise interest rates a second time in lateJuly. Since the U.S./Canadian has been range bound for several months, traderssee this market as one with great opportunity because of the possibility of abreakout move.
Weakness in global equity markets ishelping to put pressure on the Euro and the commodity-linked currencies. Risksentiment seems to have shifted overnight with investors becoming more riskaverse. Profit-taking and position squaring ahead of the start of the U.S.earnings season appears to be the catalyst behind this morning’s earlyweakness.
The Euro is trading inside of majorretracement zone at 1.2609 to 1.2782. The current chart pattern suggests adeveloping daily closing price reversal top. This could lead to the start of a2 to 3 day break. At this time 1.2609 is holding as support. A failure to holdthis level could trigger the start of an acceleration to the downside.