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Cable has traded lower during the day and has ranged between 1.5900-1.5975. For the next few days, the Support at 55-week MA (1.5755) is going to be very important level to watch for. For this week, this Support is not likely to be broken and we would expect some bounce…

The day starts like any other in Europe today, with the jitters and anxiety still prevalent within markets overshadowed by a stream of sound economic fundamentals. The incoming data is not topnotch today from Europe, yet the general sentiment is taking over following yesterday?s big manufacturing surprise from Europe and…

The RBA stunned the market by holding their cash rate steady at 3.75% and not hiking another 25bp, as was widely expected (roughly 80%). The AUD immediately collapsed, as traders anticipated eroding yield spread. The AUDUSD shed nearly one and a half big figures, trading from 0.8927 to 0.8780. However,…

The USD continued to consolidate against the Euro and CHF pairs as rising risk appetite aided equity markets. The strong US ISM manufacturing data from Monday helped overseas markets higher (the series grew at its fastest pace in January since August 2004). The GBP was softer throughout the European morning…

Although the single currency rebounded after falling to 124.45 yesterday, break of 127.08 resistance is needed to confirm low has been formed there as wave v and bring stronger rebound to 128.38, then towards 129.00/10 but reckon resistance at 129.50 would hold from here.

Aussie ran into heavy offers this morning at 0.8928 this morning and fell sharply from there, suggesting the decline from 0.9331 remains in progress and weakness towards 0.8750 cannot be ruled out, however, loss of near term downward momentum should limit downside to recent low at 0.8735 and bring another…

The RBA surprisingly kept rates unchanged at 3.75%, when the street was expecting a 25 basis point hike. As a result the AUD/USD pair immediately fell a full figure, currently trading in the .8815 range. The weaker AUD should help the export driven Australian economy by weakening the AUD, however the AUD maintains an interest rate advantage against the majors. The RBA had the following accompanying comments:

• Global economy is growing, but the expansion to be modest.
• Asian economic recovery has been quicker.
• Monetary policy may be adjusted over time.
• Global credit conditions remain difficult.
• Aussie economic conditions stronger than expected.
• RBA judged it was appropriate to hold rates steady for time being.
• Fiscal stimulus has now faded.
• Labor market is strong.
• Lenders have raised rates little more than cash rate.
• Sees upturn in housing construction.
• Resources sector investment is strong.
• Most loan rates have risen by 100 basis points.
• CPI inflation has risen somewhat recently, consistent with 2010 target.
• Business credit continues to fall.
• Credit conditions difficult for smaller business.
• Declining credit concentrated among large firms.
• Jobless rate peak is lower than expected.

On the chart below we see the AUD sell off following the rate decision as the pair moves toward the December lows @~.8733. Being resisted by the 100hr moving average since the middle of January.

Dollar/Yen climbed on Monday from 89.78 to 90.91, closing the day at 90.61. On the 1 hour chart we see a wide downward channel, and smaller upward channel from 27 January. Quotes are currently between the 20 and 50 EMA, giving mixed picture. We would therefore expect only a convincing…

The European open brought a wave of EUR sellers taking EUR/USD off the intraday high of 1.3950. China’s threat that it will take sanction on US companies over planned US arms sales to Taiwan and its displeasure over a planned meeting between Obama and the Dalai Lama brought some short-lived…

Although the British pound has continued to edge lower and weakness to 143.00 cannot be ruled out, only a daily close below support at 142.00/05 would signal the wave ii from 139.30 has ended at 150.70, then further weakness to 141.00 and then retest of 139.30 would follow.