Forex News | Currency News by Forexlive

There was a lot of Sovereign selling noted on approaches to 1.3700 on Friday last. It seems that they are happy to buy on the approach to 1.34 and off-load on any decent rallies. Easy money if you can get it. With short positions in the EUR now at record levels above 70k contracts, it is little wonder that the trailing stops are building. 1.3700 the big level to watch.

GBP/JPY is still under pressure and is closing in on the 134.60 low from last week. Not much in the way of more medium term support until 131.50.

The AUD has had some big moves recently just after RBA meetings and I expect that trend to continue. The short term range should be contained inside a broad .8800/.9050 range until the meeting tomorrow and the market will likely break heavily one way or other after the event. The general expectation is that the RBA will return to their hiking cycle but international factors may yet persuade them to pause.

Cable has fallen 100 pips this morning and it seems that the main drivers have been the UK poll suggesting that Gordon Brown would win a general election with a hung parliament plus some chatter about big M&A flows. None of this will affect the pound in the short term so I think this move might be a bit overdone, notwithstanding the overall bearish sterling sentiment.

Cable is down at 1.5160, which is almost 100 pips below the NY close, and EUR/USD has fallen back to 1.5630. Personally I never trust these early morning moves in totally illiquid markets. Short term support/resistance for the EUR/USD is 1.3600/80. Not much support in the cable until a previous pivot point around 1.5065/70.

I think the ice hockey final will be attracting more attention now than the FX market. The initial gap higher in EUR/GBP is consolidating with EUR/USD still at 1.5660 and cable at 1.5190. The AUD/USD has also opened slightly higher, currently at .8980 and I’m hearing talk of some decent sell orders around .9020.

Cable closed last week at 1.5250 but is already 50 pips lower in very early interbank trade and EUR/USD is at 1.3660, after closing last week at 1.3615. All this adds up to a big jump in EUR/GBP, up 50 pips from Friday’s .8930 close. The other EUR crosses are also moderately higher, with EUR/JPY trading at 121.30. I think we may be in for a very volatile week.

Good luck today.

Warren Buffett says the U.S. residential real estate slump will end by about 2011.

Bloomberg U.S. economy preview.

New Sunday Times poll reveals that Labour is now just two points behind the Tories.

Bugger.

Abandon hope, all ye who enter here.

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