Fri, 11 Jun 2010 00:00:00 +0200

EUR/USD Spiked after Positive News in China and Europe

The EUR/USD pair kicked off during yesterday's trading session for a second consecutive day this week. Investors turned to buying the Euro after positive economic news in China. The pair received further support by Bernanke, who stated in his speech to act as needed to aid financial stability and economic growth, increasing the likelihood U.S. rates would remain at record lows even longer than previously anticipated. British Pound and other riskier currencies gained yesterday after investors confidence improved following Trishet, ECB chairman and IMF chairman speeches. Investors put aside fears about Europe fiscal debts, after being assured by Trichet that more rescue plans would be issued if required. Crude Oil also made a sharp rebound while price per barrel traded above $75 4 weeks high, and 300pips up compared to yesterday's open price. Gold suffered from risk averse and price per ounce declined sharply to $1215, after hitting record high at the begging of the week.

EUR/USD

The daily chart's RSI signals that this pair is being over-sold and will likely see strength added to the recent upward movement. However, a bearish cross on the hourly chart's Slow Stochastic signals that a downward correction may be imminent in the nearest time frame. Waiting for a clearer signal may be the right strategy today.

GBP/USD

The price for this pair currently floats in the over-sold territory on the 4-hour chart's RSI, indicating that an upward correction may occur later today. The recent bullish cross on the 4-hour chart's Slow Stochastic supports this notion while the hourly chart's Bollinger Bands are beginning to tighten, indicating that moderate price volatility is imminent. Going long with tight stops might be the right choice today

USD/JPY

It appears that the price has recently moved towards the upper border of the hourly chart's Bollinger Bands, indicating that there is downward pressure. However, a bullish cross on the daily chart's Slow Stochastic indicates that there may be some momentum left in the recent upward correction. It may be a good strategy to wait for a clearer signal from this pair.

USD/CHF

The bullish trend is loosing its steam and the pair seems to consolidate around the 1.1440 level. The daily chart's RSI is already floating in an overbought territory suggesting that a recent upwards trend is loosing steam and a bearish correction is impending. Going short with tight stops appears to be preferable strategy

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