USD/CAD holds above key support level

FXstreet.com (Córdoba) - USD/CAD remains locked in tight range and trades nearly flat on Wednesday amid low volume in FX markets as US celebrates the Independence Day. USD/CAD hit a fresh 7-week low of 1.0118 during the Asian session, but lost momentum and has been trading in a 20-pip range ever since.

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Despite Canadian dollar recent strength, USD/CAD has failed to break decisively below the 1.0120/15 support zone, where the 50% retracement of the 0.9798/1.0444 rally and the 200-day SMA converge. At time of writing, USD/CAD is trading at the 1.0125 area.

In terms of technical levels, below 1.0120 next supports are seen at 1.0100, and the 1.0045/50 area (61.8% retracement and 100-day SMA). On the upside, resistances could be found at 1.0150, 1.0170 and 1.0200.

USD/CAD Jul 04 at 17:05 GMT

1.0126/29 (0.06%)

H1.0144 L 1.0116

S3	S2	S1	R1	R2	R3
1.0043	1.0068	1.0093	1.0148	1.0173	1.0199

Trend Index [?]	OB/OS Index [?]
Data updated on Jul 04 a 16:15 GMT (15-minute timeframe)
Slightly Bullish	Overbought

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U.S. stocks recover, end week mixed

FXstreet.com (San Francisco) - U.S. stocks recovered on Friday, one day after fears of slow growth and bank downgrades sent them sharply down.

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The rally came after the European Central Bank said it would take further steps to ease loan collateral for banks, enabling Dow industrials to rise 67 points, or 0.5% to 12,641; the S&P 500 to add 10 points, or 0.7% to 1,335, and the Nasdaq to gain 33 points, or 1.2% to 2,892.

For the week, the Dow and S&P 500 both ended in red, while the Nasdaq gained for a third consecutive week; the Dow shed 0.9%, the S&P 500 lost 0.6%, while the Nasdaq ended 0.7% higher. 

Forex Flash: We remain skeptical of next week’s EU summit - UBS

Xstreet.com (San Francisco) - Markets are relatively quiet just a couple of hours ahead of the New York close this Friday, with a bias towards risk appetite.
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There were no major headlines from the day’s ECOFIN meetings, while this weekend the BIS will host its global central banking meetings.

In the week ahead: “Investor focus will now switch to the latest EU Summit (June 28/29) but with expectations for policy responses somewhat elevated, we remain skeptical that any meaningful breakthrough will be achieved,” comments UBS. “Elsewhere, GDP numbers will be released in the UK, US and Canada.”

Spain, France sell debt; Markets await Spanish bank audit results

FXstreet.com (Barcelona) - Spanish yields rose at a bond auction held on Thursday, which was met with high demand. The country's Treasury auctioned 2.22 billion euros of debt maturing in 2014, 2015 and 2017, out of a 1-2 billion euro target. The average yield on 5-year bonds increased to 6.072%, in comparison with 4.96%.
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Also France auctioned debt on Thursday. The country rose 8.432 billion euros out of the planned 7-8.5 billion euros. Bonds maturing in February 2017 were sold at an average yield of 1.43% vs 1.72% the country had to pay at the previous auction.

Spanish bank audit results, which will be made known later on Thursday, will reveal just how much does the country need to recapitalize its distressed banking sector. Should the number exceed  €100 billion, the country's risk premium might rise again.

Forex Flash: Spain 10yr: Temporary relief to 6.30-6.50% - RBS

FXstreet.com (Barcelona) - Dmytro Bondar, analyst at RBS, writes today about Spain 10yr: "(it) Has broken 7.00% and sold off through 7.21% opening new long-term targets at 7.47%, 7.87% and 8.29%."
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"The latter is the 50% retracement from the 1995-1999 major rally, which should provide a decent support. In the short term, there is a good chance of a temporary relief to 6.30-6.50% due to a cyclicality in Spanish yields." He forecasts.  

Forex: AUD/USD holds at 1.0060; back to 1.0100

FXstreet.com (San Francisco) - After rejecting the 1.0120/30 zone in the Asian session and falling to intra-day low at 1.0055, the AUD/USD has found support at this level and has begun to rise toward 1.0100 level again but after a first attempt to break it out, the par was unable and it is trading at 1.0085.

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Pair is 0.30% below today's opening price action with FXstreet.com Trend index pointing "Slightly Bullish" and "Extremely Oversold" in the OB/OS Index. AUD/USD is just below 1.0100 level that also is the MA 200 hours.

"Market appears to have a bullish bias in AUDUSD 4-Hour charts," comments Mark De La Paz from FX Instructor. "We also have a Bearish Engulfing and is well resisted by 1.012."

"With a medium level bearish reversal pattern consider shorts from just under 1.012 the immediate target a strong support, 1.006, the Pivot Point break of which opens 1.002 for a full trend reversal," continues De la Paz. "Stop losses should be placed above 1.012."

Forex: EUR/USD consolidates below 100-hour SMA

FXstreet.com (Córdoba) - Following a short-lived relief rally on the back of Greek elections' outcome, the euro came under pressure and reversed daily gains as market recognized European woes are far from over, with Spanish borrowing costs reaching an euro-era high above 7.0% on Monday.

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EUR/USD peaked at 1.2746 during the Asian session and then fell more than 190 pips before finding support at the 1.2555 zone. At time of writing, EUR/USD is trading at the 1.2575 zone, below the broken 100-hour SMA (1.2590), where it records a 0.9% loss on the day.


"The EUR/USD is mirroring it action that started the previous week (6/11). It was the Spanish bailout that gave the EUR/USD a jolt to 1.2666, followed immediately by a fade in risk", said Fan Yang, analyst at FXTimes.

According to the analyst, below 1.2600 the EUR/USD eyes June's correction trendline. "A break below this TL, near 1.2520, should be a signal of a bearish continuation, with the first key level at 1.24-1.2410 area, before the 1.2285-1.23 June lows", said the analyst. If the market can hold above 1.2530/40, "we still have upside risk toward the next resistance pivot at 1.2820".

Forex Flash: "Sustained EUR/USD rally seem vanishingly remote" Westpac

FXstreet.com (San Francisco) - The Euro trade lower during Monday session against the Dollar after the pressures from Greece concerns and Spanish debt crisis. The EUR/USD has collapsed 175 pips from 1.2725 to reach intra-day low at 1.255 where the pair has found support at 200 hours moving average.

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The initial rally that drove the Euro to reach the highest level since May 22 at 1.2745 on the back of Greek hopes was unable to hold levels and the pair was losing stream and fall quickly throughout the European session.

Rising debt prices in Spain and weak economic data across the Eurozone are pressing down the Euro. "There is still room on the downside for our Eurozone data surprise index weaker data there will strengthen the case for ECB easing," comments the Westpac Analysis Team. "Against this backdrop the prospects for a sustained EUR/USD rally seem vanishingly remote."

Forex: EUR/USD consolidates below 100-hour SMA

FXstreet.com (Córdoba) - Following a short-lived relief rally on the back of Greek elections' outcome, the euro came under pressure and reversed daily gains as market recognized European woes are far from over, with Spanish borrowing costs reaching an euro-era high above 7.0% on Monday.

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EUR/USD peaked at 1.2746 during the Asian session and then fell more than 190 pips before finding support at the 1.2555 zone. At time of writing, EUR/USD is trading at the 1.2575 zone, below the broken 100-hour SMA (1.2590), where it records a 0.9% loss on the day.


"The EUR/USD is mirroring it action that started the previous week (6/11). It was the Spanish bailout that gave the EUR/USD a jolt to 1.2666, followed immediately by a fade in risk", said Fan Yang, analyst at FXTimes.

According to the analyst, below 1.2600 the EUR/USD eyes June's correction trendline. "A break below this TL, near 1.2520, should be a signal of a bearish continuation, with the first key level at 1.24-1.2410 area, before the 1.2285-1.23 June lows", said the analyst. If the market can hold above 1.2530/40, "we still have upside risk toward the next resistance pivot at 1.2820".

RBA Back Maintain Interest Rates 4.75 Percent

Central Bank of Australia (RBA) today (3 / 5) decided to maintain interest rates at 4.75 percent level. Thus, the RBA has a record six consecutive months to maintain interest rates at that level.

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The decision was in line with that anticipated by economists and market participants in advance.

In a statement accompanying the announcement of interest rates, RBA Governor Glenn Stevens said that recent inflation data showed the effects of declining production due to floods and Cyclone Yasi. Stevens added that the RBA predicts inflation will approach the target level within a year along with the reduced pressure of rising prices due to factors that are temporary.

Data released by the Australian Bureau of Statistics (ABS) earlier showed Australian inflation rises above expectations in the first quarter of 2011. Spurred by rising prices of food and fuel, inflation jumped to 1.6 percent in the first quarter of 2011 from 0.4 percent in the fourth quarter of 2010 before.

Jump in rising inflation in the first quarter, according to the ABS, the highest since the June quarter 2006.