A late session rally in U.S. equity markets led to mixed closes in the Forex market.  Despite several efforts to break the stock market during the trading session, demand for higher risk assets prevailed by the end of the day sending most major Forex markets to a higher close.

GBP USD finished higher although selling pressure was present following a test of 1.70.  This could be an indication that buying may be slowing down at current levels. It may also mean that traders are reluctant to put on new positions ahead of this week’s Bank of England meeting on August 6th.

The EUR USD recovered after an intraday sell-off following a test of 1.44.  At times during the trading session it appeared that weakening equity markets would trigger a reversal top in the Euro, but a late session rally in the stock market stopped the break in the Euro.  Trading may be sideways the next few days as investors may be a little reluctant to put on major positions ahead of this week’s European Central Bank meeting on August 6th.

The USD CAD posted a closing price reversal bottom.  This could indicate the start of a 2-3 day rally or a 50% retracement of the recent break.  Higher equity markets and a flat crude oil seemed to be a non-factor today.  Traders were most likely focusing on the recent rise in the Canadian Dollar and its possible negative effect on the Canadian economy especially Canadian exports.

The USD JPY traded mixed today.  The choppy two-sided trade in the equity markets prevented traders from picking a side today.  The divergence of this currency pair from the equity markets could also be a sign that equity markets are nearing a top.  

The AUD USD posted a new high for the year following the news that the Reserve Bank of Australia decided to leave interest rates unchanged while opening up the possibility of a rate hike later this year if the economy improves.  Today’s rally seemed labored which is an indication that demand for higher risk assets may be waning at current levels.

The NZD USD also rallied to a new high this year as appetite for higher yielding assets continued.  Today’s rally and the news from Australia regarding a future interest rate hike may have negated last week’s negative news from the Reserve Bank of New Zealand regarding a possible interest rate cut if the economy doesn’t start showing signs of a recovery.



Contact Us:
Local: 312-896-3930
Toll Free: 800-971-2440

DISCLAIMER: Forex (off-exchange foreign currency futures and options or FX) trading involves substantial risk of loss and is not suitable for every investor. The value of currencies may fluctuate and investors may lose all or more than their original investments. Risks also include, but are not limited to, the potential for changing political and/or economic conditions that may substantially affect the price and/or liquidity of a currency. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. The leveraged nature of FX trading means that any market movement will have an equally proportional effect on your deposited funds and such may work against you as well as for you. In no event should the content of this correspondence be construed as an express or implied promise or guarantee from B.I.G. Forex, LLC and Brewer Investment Group, LLC or its subsidiaries and/or affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of positions such as “spread” or “straddle” trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information contained in this correspondence is intended for informational purposes only and was obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted.