In all the brouhaha about Greece and the euro it’s easy to forget what else is going on in the forex market. Sometimes I feel Greece is taking up too much space in traders’ heads at the expense of other markets and currencies. And for a perfect example of what I mean look no further than the continued strength in GBP which has seen some great trends in GBP/NZD & GBP/CAD & I’m still waiting for the GBP/JPY to turn lower, but only once we see a major reversal in risk sentiment.
On both charts the NinjaTrader trend monitor has remained firmly bullish with only a minor transition on the GBP/CAD reflecting the recent pause in the longer term trend. However, moving to the NinjaTrader currency strength indicator to the left of the chart, here we can see that the British Pound, the yellow line, is now moving ever deeper into the oversold region on the daily timeframe, so this trend may now be coming to an end.
From a fundamental perspective, overnight we have the HSBC Flash Manufacturing PMI from China with the French and German versions to follow later. And whilst these releases are important, the two to watch are the durable goods for the US, and a speech from FOMC Member Powell during the US session. This speech is extremely important as it touches on the FED’s upcoming decision on interest rates.
From a technical standpoint the USD index is not particularly revealing, despite last Thursday’s hammer candle which has moved the index marginally higher, so tomorrow may provide the trigger for a more extended move.