By: David Leal
The buying in equities may have tapered out for today, but the bullish move remains in play. Commodities fell along with equities mainly due to the strengthening of the dollar. The Euro lost ground in anticipation of a rate cut next week, and the only other currency that made decent gains today outside of the dollar was the yen.Next Monday, Trichet will be speaking to the European Parliament. This speech will have significant impact on the euro if he signals that he will not be cutting rates, since a cut has been priced in. The actual rate decision will be on Thursday. The other big news events are on Friday in the form of employment numbers and a speech by Bernanke. The employment data will be more important. If it comes in as expected or better look for the market to latch on with optimism, while a larger number will kill it.
EURUSD: We are still fundamentally bullish on this pair, and today’s action gave for a nice entry price. There is a good chance that the pair could get to the 1.30 level, which would offer up good support to buy off of. USDCAD: 1.2440 held as resistance today. Look to sell on signs of a return to dollar weakness. With enough momentum this will easily break support at 1.2200.