The week kicks off with a downbeat tone, we have seen the U.S. dollar paring the losses seen on Friday trigered by markets reconsideing QE3 probabilities. The safe-haven currency gained on dampened risk-appetite, mainly provoked by Spain slipping into recession, as the economy contracted by 0.3 percent in the first quarter, meanwhile Canadian GDP showed the country's economy contracted by 0.2% in February, adding into the overall gloomy scene.
From the U.S, personal spending dropped from 0.9% in February to 0.3% in March, while personal income ticked 0.1 percent higher from 0.3% in February, on the other hand, Chicago purchasing managers index dropped sharply as well printing a 56.2 from 62.2 in February.
The EUR/USD pair pared Friday's gains after printing a high at 1.3270; the pair reversed currently retesting the major support area and the 50-days SMA around 1.3220-1.3200. We expect some support from this area; only a break with steady trading below 1.3200 could extend the downside pressure towards 1.3150 and 1.3100 areas. To the upside taking 1.3270 will confirm the continuations scenario to 1.3300 and 1.3350.
The GBP/USD touched 1.6300 targeted resistance level, where it was rejected sharply, the pair fell to trade back below 1.6250, a downside pullback towards 1.6200 looks probable now, as stochastic has crossed over negatively and left overbought area, however any downside pullback should be stopped above 1.6165 key support level, as we still see further upside for the currency within the upcoming period.
The USD/JPY resumed the downside journey failing to maintain any bullish momentum, the pair is currently threatening 80.00 key support and psychological barrier, a sustained break below 80.00 will negate any short term possible recovery, and shall open the door initially towards 79.50.
After the surprisingly bad growth figures, the USD/CAD rallied and currently retesting the key 0.9870 resistance level, a break above this resistance may confirm a double bottom reversal pattern and send the pair higher over the near term towards 0.9960-0.9970 latest swing high. On the other hand, trading back below 0.9840 could resume the overall bearish bias.
Technical analysis for precious metals with major support and resistance levels and recommendations for 18-08-2009