Forex – Daily Market Review – US Session – USD to remain under pressure if Fed disappoints

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USD moved higher versus the EUR today with the pair falling from 1.4597 to 1.4538. However, EUR/USD will likely test an all time low this week if the Fed shows no sign of changing its easy monetary policy. With banks closed across the globe for the holidays and no major US economic news on the calendar, the April 26-27 Federal Open Market Committee meeting will be the key risk this week as traders try to measure the direction of the US policy. The dollar index traded up 0.13% at 74.095. Though many traders say it could test a 3 year low of 73.734 hit last week. A break of that could open the way for a test of the record low of 70.698 hit in 2008. If Bernanke indicates that the Fed’s accommodative policy may continue for the foreseeable future, the dollar will likely see selling pushing the EUR/USD towards the key $1.5 level.

 

CAD moved higher against the USD today as commodity prices climbed and higher-yielding assets were bid after North American markets reopened following the long Easter holiday weekend. USD/CAD opened the session trading at 0.9512 and moved as high as 0.9559. The highlight of the week’s events is the expected news conference by Federal Reserve Chairman Ben Bernanke on Wednesday after the bank’s 2-day policy meeting. Canadian bonds closely tracked US Treasury prices higher as market players look to the Fed for signs it will not rush to reduce in size its huge balance sheet, though buying was kept to a minimum before a series of auctions.

 

Against the JPY, the USD fell in today’s session from an opening price of 81.97 to 81.75. USD/JPY has weakened from 85.52 since early April with recent support seen just below 82.

AUD hit a new 29-year high today (during the previous session) which suggests that traders were still enthusiastic to hold higher yielding assets. The AUD, which tends to attract buying when the global economy is doing well and commodity prices rise, touched a 29-year high of $1.0774.It later trimmed its gains to trade in the US session around $1.0719.

 

Gold hit a record high of $1518.05 an ounce at the start of the session. It then fell along with silver to $1501.7 an ounce. It is currently trading at around $1509.3

EURUSD USDJPY GBPUSD USDCHF USDCAD GOLD
OPEN 

(12:00 GMT)

1.4597 81.97 1.6530 0.8802 0.9512 1517.4
DAY’S HIGH 1.4613 82.08 1.6546 0.8825 0.9559 1518.0
DAY’S LOW 1.4538 81.75 1.6466 0.8786 0.9502 1501.7
CLOSE 

(21:00 GMT)

1.4581 81.67 1.6498 0.8805 0.9543 1506.3