Market demonstrates modest movements amid the lack of concrete news from Europe.
The Prime Minister of Spain Rajoy had to admit that the ECB conditions, imposed last week, are likely a ransom demand by the presiding state.
French president Hollande had to announce about spending cut by over 30 bn euro which shows that only Germany is doing really well on the old continent. It is known that it is not good when just one does well where many are involved. The same situation is happening in the Eurozone. Such imbalance may be dangerous for the single currency block.
The euro, however, has not changed its course in the last hours. The currency failed to reach 1.28 but it still holds the level of 1.2730. It seems to lose its upward pace when the market’s attention is drawn towards the Fed meeting which will take place on Wednesday and Thursday. At the end of the 2-days session, the decision on monetary policy (with or without QE3) will be announced.
The rest of the coins have a similar behavior with some nuances. The Australian dollar hardly covers the gap left in the Asian session at 1.0395 on Monday, although it seems to be much stronger than it was in these hours to meet a trend continuation flag in 4 hours charts. Only overcoming of this level could stretch their 1.0410 1.0430 rally.
The pound hit a new high since 15 May, after the UK trade deficit figures for August were better than expected. This is a rare phenomenon that occurs when markets go to celebrate the figures that are very bad, but not as much as the previous expectation. Not a good sign for an economy.
The yen continues to show signs of strength, and bankruptcy support of 78 per dollar. The intervention airs again begin to blow in the markets. The Bank of Japan has already taken action in this regard, although, far from the actual values. However, this probability increases when the time passes by and is not easy to buy yen right now. It is known that the yen often works opposed to the other leading currencies, driven by waves of confidence or pessimism in the markets. However, the yen now behaves in accordance to the euro, pound, etc. On Thursday, the Fed statement will shed light on the future of the traditional coin.
As the Canadian dollar remains strong in these times, it is already close to 0.97, highest value since August 2011. The strength of the oil, and the very core of the Loonie in Canada maintain high levels, but its kicks are usually too strong. It better, in this instance, to search for crossing bullish positions of USD/CAD, knowing that there may be an imminent major correction.
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