Forex Analysis by HM CactusJack, 2010/08/13
Risk Aversion was still present in the yesterdays trading. The volume and depth of the sell off was much more contained than we saw the previous day. With the Dow trading at 10,320 down -58.88 and -0.57% for the day. The S&P closed at 1,084 down -6 and -0.54% at the end of the day. The S&P is now 44 points above a major psychological level of support at 1,040. We made reference to this psychological level of support yesterday and moved a little closer to it today.
This lower level of selling did end the USD/CAD rally in the resistance area we were watching yesterday at 1.0500 with the high for the day at 1.0495. This was also paired with a rally in CAD/JPY.These two pairs should see some nice price action between now and market close.
Cable and Euro also staged a week rally but sold at or close to their key levels of resistance.I think a good pair to watch for insight into the market tomorrow is USD/JPY currently trading close to a resistance level at 86.20.WE will see a break out higher from here or the opposite this level of resistance holding. Either way this pair should give us insight into tomorrows trend and price action.
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