THE TIPSTER
IT SEEMS sterling-dollar may give itself enough cable to hang itself at the $1.5780/90 level again – an area where it has met resistance several times over the past 12 weeks. Sterling has also seen around 10 consecutive days of gains against the greenback. Should the resistance level break convincingly to the upside then the $1.5920 level will be the next target. CMC Markets offers a spread on sterling dollar of $1.5753-$1.5756.
Dollar-Japanese yen’s steady downtrend has once again put the intervention cat among the pigeons, as last week’s Fed statement saw the dollar plumb new lows for the year so far. Fed policymakers put out strong hints last week that rates in the US will stay at their current ultra-low level, which has confounded those who were hoping for some renewed dollar strength, with markets taking the statement as the signal for yet another bout of heavy selling of the greenback. Talk of intervention is likely to build in the coming days, but traders can take heart from the fact that interventions by the Japanese government are usually as ephemeral as the spring cherry blossom. IG Index quotes dollar-Japanese yen ¥7635.8-¥7638.3
Sterling-euro continues to battle around the €1.2000 level with no clear winner at the moment, but the recent downward trend of the pair could be forming a bullish flag formation. As the consolidation has got underway there could be another leg higher for sterling, which will need to come from a renewed burst of euro weakness. Capital Spreads quotes €1.1967-€1.1970 for sterling-euro.
Two months ago, euro-Swiss franc was heading towards SFr1.25 on rumours that the Swiss National Bank (SNB) was on the verge of raising its peg from SFr1.20. Yet the Swiss franc has risen ever since, meaning that the euro-Swiss franc has fallen, despite a lessening of Eurozone tensions. Now traders look ready to test the SFr1.20 level and see how determined the central bank is, with its new chairman, to drive the Swiss franc lower. GFT quotes euro-Swiss franc at SFr1.2057-SFr1.2058.
Euro-dollar technical traders were getting a little excited yesterday as the euro climbed to the $1.320 level, failed to take out the previous day’s highs and set up a triple top. A break of a two week trendline and a head and shoulders pattern with a neckline around $1.3080, which could potentially take it back to the $1.2950 level. Expect sellers between $1.3080-$1.3120. Spread Co offers a spread on euro-dollar of $1.30772-$1.30780.