The USD took advantage of fresh negative sentiment in the US session to gain across the board with the Bernanke inspired rally on Monday failing to hold into Tuesday trade. A sharp reversal in the US session with US stocks under pressure after March Consumer Confidence slipped to 70.6vs. 71.6 previously on increasing gasoline prices. Looking ahead, February Durable Goods Orders forecast at 3 vs. -3.7% previously.
The Euro (EUR)
The EUR/USD came under pressure after failing at the big resistance 1.3380 in Early European trade. EUR/GBP reversed as well and we saw the downside tested with a Fitch report out negative on Portuguese banks. The outlook is mixed with a lack of conviction the only certainty lately.
The Sterling (GBP)
Strong Retail data allowed a test of 1.6000 in Europe but the market failed to break and we saw a pull back into the US session. The pound is still the strongest risk currency in the market recently and GBP/AUD buying last night highlighted the dramatic change of fortunes since last recent all-time lows below 1.4500. Looking ahead, Q4 GDP forecast at -0.2% vs. -0.2% previously.
The Japanese Yen (JPY)
The USD/JPY refused to behave overnight surging past Y83 on the stronger USD and ignoring the risk aversion. The AUD/JPY reversed under Y87 however and is in danger of unwinding with the sentiment towards the former favorite cross fragile lately.
Australian Dollar (AUD)
The AUD/USD moved up to 1.0550 in European session in line with the EUR/USD move higher but when selling came in later the market sold the Aussie hardest and we saw the EUR/AUD and GBP/AUD unwind for further gains. The 200 Day moving average is found at 1.0400 and is a traditional trend indicator.
Oil & Gold (XAU)
Gold tested $1700 before reversing with the rest of the market and the failure could prompt a second day of profit taking. Oil ended roughly unchanged in choppy trade closing just under $107.
Pairs to watch
EUR/USD: Is the rally over or more time needed?
AUD/USD: Searching for buyers 1.0400?
Technical Commentary