Another leg up in the EURUSD
The EURUSD continues its move higher. Earlier ECB Junker commented how he was starting to have “great concern” over the value of the EURo, That was worth a selloff of about 6 pips (to 1.4219),before the market moved back above 1.4230, then 1.4240, then the psychological level of 1.4250, then 1.4260 and the beat goes on.
How far can it go? We are in no mans land. On a technical level there is a channel top (using the daily chart) that comes in at 1.4323ish.
It might seem smart to try an pick a top today. However, with the consistent grind higher, it has the feel of a short market that will have to decide to stay short or cover before the weekend.
Shadow MPC rumored to request a cut in BOE rates…
There is a rumor in the market, that the “Shadow” Monetary Policy Commitee (MPC) will report in the weekend”s Sunday Times that they recommend the BoE cut the UK base rate by 25bp to 5.5% at next weeks MPC meeting (on Oct 4). The thought was it was the actual MPC that was to cut. That caused the big selloff in GBPUSD. When it was reported to be the Shadow MPC, the short covering commenced.
GBPUSD squeezes higher again
Needless to say the markets continue their choppy action. GBPUSD in particular continues it wild road. One minute trading at 2.0320 then bid all way up to 203.62. Key level for GBPJPY is once again the 233.18 (the closing level on 12/31/06). The low was 233.19. Unbelievable. Now have esistance at the 233.83 level. Watch that level now….
GBPJPY testing support at 233.83
Good support right here.
GBP out of favor again
Broke through 2.0340. GBPJPY getting sold. EURGBP bid up again. USDCHF has not been able to squeeze above 1.1700. EURUSD cannot get below 1.4190. USDJPY has a ceiling at 115.30.
Market tested levels and held
1.4190 held in EURUSD
2.0340 held in GBUSD
1.1701 held in USDCHF
The market is acting very choppy
It seems that stops are being pushed only to be reversed by those with the leverage. GBPUSD and EURUSD were the latest as they each made it through key tech levels (at 2.0366 and 1.4200). However, after a level of active buying, they reversed back below these levels, frustrating those that were forced to cover shorts.
Earlier overnight, GBPUSD was bought heavily in the face of bearish information about the Northern Rock borrowing from the BOE. That was reversed strongly as the market raced to new highs.
Overall, the dollar is bearish. USDCHF is lower and is testing a trendline at 1.1692 (Hourly chart). EURUSD made new highs at 1.4209 – trading at 1.4203. GBPUSD broke through 2.0366 to a high of 2.0380. It is back down to 2.0361 but remains supported.
On a short term intraday basis, the bias would change if GBPUSD would get below 2.0344 level. EURUSD would need to trade and stay below 1.4190. USDCHF would need to trade above 1.1701. Anything is possible on the last day of the month withthe stock market trading within shouting distance of a round number like 14,000.
ECB source reiterates that tightening bias remains intact
This is from a wire headlline. EURUSD moves above resitance at 1.4200. GBPUSD bounces along with it at 2.0370 last. EURGBP remains constant at 0.6971.
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