Stabilized Rates in the UK and EU Just Aren’t Enough
With the exception of the USD/JPY, US Dollar strengthened across the board overnight, even though the Bank of England and the European Central Bank kept rates steady. There are just too many variables lining up to hammer the European Union right now and that has brought strength to the USD against the Euro for obvious reasons. But it has also had the unintended consequence of bringing strength to the Japanese Yen.
With insurmountable debt in both Portugal and Greece and astronomical unemployment numbers in Portugal and Spain the stock markets in Europe have taken a huge hit and that triggers the fear button. You combine that with China’s monetary tightening and surprise corrections in the Reserve Bank of Australia’s monetary policy and you’ve got a whole heck of a lot of reason for people to be buying back any trade that even remotely looks like a carry trade.
What this means for the USD bulls is that if the market is buying dollars on fear today it is likely that we’ll see a pause today as the big money waits for a good jobs report on Friday, 2/5/2010, which will give them further reason to buy on fundamentals.
The USD could be in for another run to the upside. Long term USD bulls will need to keep in mind that any strong moves to the USD side will likely be corrected by next Tuesday, as industrial numbers come out of Germany.
Triffany Hammond helps traders of all levels, gain the tools, resources and guidance necessary to build on their strengths and work around their weaknesses so that they can make the best possible decisions for themselves in the Forex Market. Triffany is a regular speaker and contributor at 
Wow! Triffany, what a package -:) Can you identify any more kinky poos to confuse traders… ha ha…. excellent run down. Thanks much. appreciated insight
Today looks big for the GBPUSD … with the rates staying the same and everything Triffany wrote above and with Jerry laughing, as i look at it now, it looks like this thing might close below the 1.58 level on the 4HR which if you look on the Daily chart is basically the bottom of the massive neck line/daily range, if the report tomorrow is any good this thing might go south, my next stop down is around 1.5250.
A bad set of numbers for the Canadian people followed right after that with good factory order numbers for the US has sent the USDCAD back to where i want it … UP, i want this thing to get to 1.0950 !!!
I leave with 1 last song … Up up and awaaaay in my beautiful USDCHF !!!
The Initial Jobless Claims report came out today and it looks like it came out 20K higher than projected – 480K.
NFP Report is tomorrow, and I’m wondering if todays initial jobless claims report is an omen for tomorrow’s report. It doesn’t augur well. As much as the dollar is having a fantastic run to the upside, if the NFP comes out with not so stellar numbers tomorrow, the upside might be in for a pause… or maybe a reversal.
From a technical standpoint, the GBPUSD is hovering around the first monthly resistance pivot (M1). The last time this proved as a strong resistance point was back in mid Oct.