The Dollar loses its intraday momentum, GBP/USD and USD/CAD at critical levels

Gold had a major influence on yesterday’s session dropping during the first half of the trading day by approximately $10. Already during Asian hours, Gold had an influence sending the Nikkei and the Shanghai Comp, down at the start of the session. Throughout the session sentiment improved and most of the indices closed with a minor change. The chart of the day was the Shanghai Comp, forming a hammer candlestick throughout the day.


 
On the U.S market the indices opened lower but quickly regained their strength closing the day mixed. The S&P500 finished with -0.34% loss, while the Nasdaq climbed higher by 0.24%. Even though the start was negative, economic data helped to cushion the fall. The leading index came out under expectations but showed a positive figure of 0.6%. In addition, AIG drove sentiment higher throughout the session, increasing by over 20% after the WSJ mentioned that the House Oversight and Government Reform Committee instructed his staff to look at a proposal from former AIG head Maurice R. “Hank” Greenberg for restricting the government’s bailout of the company.

The Dollar Surges but Quickly Falls

On the Forex market the Dollar started the day on a positive note, backed by falling Gold and Oil Prices. The index rallied throughout the first half of the session, but quickly lost its momentum, retracing lower throughout the U.S session. The massive turnaround presented sharp movements on the various currency pairs, sending the EUR/USD and the AUD/USD higher. The leader of the day was the NZD/USD climbing higher to touch a new yearly high.

When observing the charts one can see that the three preferred pairs by investors are still the high yielding ones, meaning the Australian/ New Zealand Dollar and the Euro. Despite that fact other low yielding pairs are now trading at interesting levels. The USD/CAD presented a turnaround during yesterday’s session, but bounced off trend line resistance, finishing the session within its recent bearish triangular pattern. The GBP/USD found support during the second half of the session, closing just below its 100 day moving average, on support. The current level is acting as a pivot, whereas a break could lead the pair to either of the targets.

Even though the two currencies are still yielding a low return against the Dollar, one should observe the price pattern, especially as current levels could present potential setups. For further information observe the charts.

USD/CAD – Daily Chart



GBP/USD – Daily Chart

Market Data to Watch Out For

As economic calendar is lacking any major market moving data this morning, investor’s will focus on the U.S session today, to see if the indices follow through and continue higher. Throughout the session, the U.S is expected to release its House Price Index and Richmond Manufacturing Index.

In addition Canada’s retail sales result could spark some movement on the USD/CAD, especially as the result is expected to show a mild increase of only 0.5%, compared to last month’s result of 1%.

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