By Mercaforex

EUR/USD:
The EUR gains but is it enough to reverse sentiment?

The Dollar is getting battered today as its G-10 rivals retrace recent losses. Is today's price action enough to reverse sentiment? From a fundamental and technical perspective, we are not ready to call out the EUR Bulls just yet.

First the forex technical side; As we have mentioned before, 1.38 is acting as EUR resistance. Note on the chart below the number of daily candles that closed just below or had a high just below 1.38. Additionally, 1.38 is the 50% Fibonacci Retrace level, generated from the EUR's low and high of 2009. Lastly, both the 50 day & 100 day MA's are downward sloping implicative of falling prices.

Now, from the fundamental perspective: The EUR has fallen so strongly over concerns of sovereign debt stemming from the Euro sector. Last we checked that issue has yet to be resolved. This EUR run is due to piggybacking, as it is the benefactor of the G-10's appreciation coupled with a lack of bad news from Greece.

GBP/USD:
The Pound is almost back in the range.

We continue to talk about consolidation as it is the fuel that generates breakouts. As we all know the GBP fell through the range about 2 weeks ago, but it failed to generate a precipitous fall and for that matter it has failed to claw its way back as well.

Tuesday's price action is key. We have 2 measure to define the range, either by its absolute high/low or by its highest closing price and its lowest closing price. You may be saying to yourself that is just semantics. The lowest low of the range is 1.5705 while the lowest close of the range is 1.5799. Now it may just be semantics but you do have to wonder, why with all the price action today, were there not enough buyers willing to buy above 1.5799, resistance? Combine that train of thought with the Moving Average crosses that we frequently mention and the Pound may not be out of the woods just yet.

AUD & NZD:
Commodity Currencies rise sharply.

There was continued positive manufacturing data released today in the U.S, as the Empire Manufacturing figures pointed towards continued growth. As manufacturing expands so does the purchase or demand for commodities. The currencies with the highest correlation to commodity prices (such as the AUD & NZD) will benefit the most. Currently the AUD is up 1.49% and the NZD 1.42%.

GOLD:
Just got a little more precious.

We talked about Gold yesterday, but today's price action solidly took out the 50 day MA as well as the 100 day MA. In yesterday's piece we mentioned that we would like to see Gold eclipse the high prior to the most recent. Gold looks like it will close on par with the last high (see chart below), but we would like to see prices rise above even the high set before that, right around 1,155, before turning bullish on Gold.

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