What Is FX: Small Hiccup—then…

Good evening What IS FX traders;  the euro was the day’s outstanding performer as all the majors kicked the usd to the curb…HARD.  As What Is FX reported earlier today, the market had exceeded the 1.3300 level, piercing upward to 1.3340.  Lifted by the German IFO, the pair had pulled back by the US open.

As the price action waffled around the big figure, What Is FX got stopped out, first, for a long position, then for a short.  We hate it when that happens.  But the Jobless Report, and then the Housing Report, from the US, aided a building rise in risk appetite.

What Is FX ended up with a large long position at 1.3310, just before the market took off for the stratosphere.  We have topped out now at 1.3370, and the market is consolidating it’s gains.  From this point we will still be looking higher, unless we see a pull back below 1.3260.  Of course, any long positions should be liquidated long before then.  We have interim support around 1.3340 which was the former high price on the day and is now likely going to turn into support.  We also have a rising support line of this run, which, if the price continues to consolidate, will come together around 1.3355-60.

So we will look to see if we get another leg up over night.  There are a couple of reports due out that should help us; US new Home Sales, and U. of M Consumer Confidence Report.  Sales are forecast to be higher, predicted to come in at their highest levels since May of 2010, up 2.5%.  The Consumer survey is expected to come in at 73.0 up form 72.5 last month.  Should these reports hit their estimates or higher, we should see the risk trade continue to be supported through the close tomorrow.  Of course, surprise shortfalls, may dry up risk appetite and send funds pouring back into USD.

One more note in the current market environment; it is worth noting that the only real safe haven is now the USD.  While in days gone by we might see money pouring into the yen or swissy, they are now both subject to governmental intervention.  Thus they forfeit their high standing in that category.