Jobs Data Marked Near-term Trend Changes In Jan And Feb; What About Now?

British Pound:  Sterling fell for the second consecutive week for the first time since last September.  Despite the relatively successful vaccine rollout and plans to fully re-open by June 21, sterling has shine has dimmed given the jump in US rates.  Sterling peaked on February 24 on a spike to almost $1.4240.  Before the weekend, it slipped below $1.38 for the first time since Valentine's.  The five-day moving average is below the 20-day moving average, not seen since the middle of December.  The momentum indicators are falling hard.  The lower Bollinger Band will begin the new week near $1.3720, which is slightly above the (38.2%) retracement objective of the rally since the US election.   A break of that area runs into a band of congestion that extends to $1.3600.  The (50%) retracement objective is near $1.3550.   The $1.3900-$1.3925 may cap gains (FXB).   

Canadian Dollar:  The Canadian dollar was one of two major currencies to appreciate against the US dollar last week (the other being the Norwegian krone).  It is the fourth weekly loss for the greenback in the last five weeks.  Ahead of the weekend, the US dollar tested the week's high, just below CAD1.2740.  As US stocks turned up and bonds stabilized ahead of the weekend, the US dollar reversed lower and made new lows late in the session,  leaving behind a bearish shooting star candlestick pattern.  Initial support for the greenback may be near CAD1.26, but we suspect there is scope for returning toward the multiyear low set in late February near CAD1.2470 (FXC). 

Australian Dollar:   After selling off into the end of February, the Australian dollar tried recovering last week and stalled near $0.7850, a retracement of the drop and proceeded to pot another leg down to about $0.7620, through the lower Bollinger Band (~$0.7635) ahead of the weekend.  Although it dipped below $0.7600 in late January, it has not below it this year.  It was the second consecutive weekly loss, the first since last June.  The momentum indicators are falling, and the five-day moving average is below the 20-day.  The close was nothing impressive, near the middle of the range, but we suspect a firmer tone to start the new week.  Initial resistance is likely $0.7770 and then $0.7820 (FXA).

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Read more by Marc on his site Marc to Market.

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