Inline Job Loss While Trichet UNBIASED

THE DOLLAR IS ON A STREAK! The job loss came nearly inline with expectations the six straight monthly shed, and the unemployment rate was unrevised at 5.5% yet the trigger was taken for profit taking and the dollar shot back especially as Trichet justified the move and now has taken the UNBIASED stance as now he says policy is accommodative for the euro area. The dollar had the boost as markets were expecting the data to come in actually weakening above expectations, and now it depends whether the dollar is able to drag majors back into the ranged channel they have been trading in, and cancel their new upside waves.

Trichet was much less hawkish than expected in his press conference providing the insight that this hike was it for the ECB and none is to follow. The ECB sees that now rates are to cool inflation and inflation expectations while growth softens yet fundamentals remains sound in the euro area.

The euro lost heavy grounds shedding all its early gains after setting the high above $1.59 mark the euro attempted the upper range of the Triangular Channel at 1.5748 to set the low at 1.5736 and now trading at the channel's barrier. If the euro manages to breach the and close within the Triangle and below 1.5720s then the downside heading is to be reflected and the euro will be back in the range of play which might take it as low as 1.5530s once more yet that needs confirmation only if the short-term upside channel is breached.

A successful breach for the channel will be trading well below 1.5680s and consolidating below that level on a daily basis.

The pound managed to reverse to the downside since early trade after severe contraction was revealed in their prominent services sector. Sterling breached the support level at 1.9878 to set the low at 1.9810 strong levels, which resides upon the lower band of the short-term upside channel, breaching that level opens the way till 1.9754 and then 1.9606.

The USDJPY asset the high of 106.92 where breaching that level into 107s with the bullish momentum will set the pair once more among the medium-term upside channel to target 109 levels once more. Nevertheless with contraction in the ISM services and the strong barrier the pair fell short to trade once more around 106.30s.

The dollar spike was rather an overrated profit taking wave as the stronger dollar on the back of failed expectations to be met for the euro will not last long if the U.S economy does not provide ongoing strong fundamentals, and shall its strength prevail the dollar must take majors down to cancel the short upside channels and if it fails this will only be providing majors with the chance to gather momentum after being overbought for a while and they will attempt their upper targets once more.

Crown Forex

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