The major currency pairs are gaining constantly along with the major stock markets including the Dax, Nikkei, and SP 500 that are trading at record high levels, but the question is why now.
The euro gained 40 points against the greenback yesterday where it has tested the 1.3620 resistance level after the release of the German Prelim CPI data that showed positive movement in the prices in the Europe’s largest economy. The pair is currently trading at 1.3615 before the start of the European session on Friday where the investors are looking forward to the German retail sales and French consumer spending data that are set to be released in the European session.
A move below today’s pivot point level at 1.3596 could bring it down to test the cluster of supports at 1.3589 1.3582 and 1.3568 and 1.3540. The pair would remain bullish as long as it sustains above the 1.3517 critical support area.
The British pound is just carrying forward its movement based on its technical levels where it gained 65 points yesterday and is trading at 1.6356 where it has resistance levels at 1.6383 1.6395 and 1.6407. The technical levels say that the pair is extremely bullish not only its short-term charts, but as well as the medium to long-term timeframe charts that suit swing traders.
The fundamentals to look forward for today are the nationwide housing price index and the net lending to individuals, which would reflect the flow of money and spending in the housing sector and other investment areas by the individuals.
However, we need to wait for the bearish correction that is due for the pair and also keep in touch with the latest news coming from FED regarding the tapering plan, which would surely let the U.S. dollar to gain strongly against the major currencies and of course gold.
Not only this, the stock markets are also inflating constantly which may come to an end of this bullish rally and could be disastrous for the bulls where profit taking and bearish speculation and market sentiment could drop the markets down immediately.
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