EUR USD Trading Weaker as Trichet Talks Up Dollar

James Hyerczyk from ForexHound.com at 11/17/09

 

The EUR USD is trading sharply lower at the mid-session after European Central Bank President Trichet talked up the Dollar. Once again it looks like the Euro is failing slightly above the $1.5000 area. The high for the year at 1.5063 in October has repelled all recent attempts to break this level. Traders seem fearful that the ECB may take stronger action other than verbal intervention to force the Euro lower.

The GBP USD is trading under pressure at the mid-session. Yesterday’s rally was triggered by a Bank of England official who said the U.K. economy was beginning to recover. This statement seemed like a challenge to a comment from BoE Governor King who said last week that a lower British Pound would benefit the economy.

Weaker crude oil and lower equity prices are helping to support a strong rally in the USD CAD. Traders are also fearful of possible action by the Bank of Canada if they take the Canadian Dollar higher. The BoC wants a weaker currency to stimulate the economy.

Overnight the Reserve Bank of Australia released the minutes from its November 3rd meeting. The minutes hinted that an interest rate hike over the near term is not likely. This is helping to pressure the AUD USD this morning.

The NZD USD is feeling selling pressure as demand for higher yielding assets is falling. The main trend is down. The charts indicate that .7302 to .7301 is a possible downside target over the next 2 to 3 days.

The stronger Dollar is helping to form a closing price reversal in the USD JPY. This could trigger the start of a 2 to 3 day rally.

The USD CHF is in a down trend and range bound. The main range is 1.0337 to 1.0035. This range forms a retracement zone at 1.0186 to 1.0222. This morning’s strong rally took this market to the 50% level at 1.0186.