Forex News & Currency Analysis

The G20 met on Monday and pledged to keep emergency stimulus spending in place until a global recovery is assured. This moved Forex investors out of the US Dollar and into the higher yielding currencies as well as the stalwart Euro and British Pound.

The declaration by the G20 members was interpreted as an affirmation that interest rates will remain low for some time, a situation that leaves an abundance of cheap money to buy stocks, commodities and other currencies.

At 11:00PM GMT, the US Dollar was trading down 1% to the Euro to 1.4992, down 1.75% to the Canadian Dollar to 1.0565, down .85% to the British Pound to 1.6751, down 1.2% to the Australian Dollar to .9297, down 2.24% to the New Zealand Dollar  to .742 and down .89% against the Swiss Franc to 1.008.  The Dollar did rise .18% versus the Japanese Yen to 90.01.

Overall, the Dollar has fallen to its lowest level in 15 months against a basket of currencies, on its way to its largest single day drop in half a year.  The ICE futures Dollar index was trading last at 75.145, down 1.05% on the day.

We discussed the weekly pivots earlier this week as key for the USD this week, and the EUR/USD, since crossing above the 1.4825 area pivot on Wednesday, has twice found support in that area, including today.

Meanwhile, the recent sell-off wave back below the old high offers a wave setup in which bears are looking for resistance to come in at the usual Fibonacci level suspects at forex market turnarounds.

That 0.764 retracement comes in at around 1.4960 if this 1.4895 area 0.618 Fibonacci can’t hold back the rally. Failure of the 0 .764 level to hold would suggest a full retest of 1.5063 high and perhaps beyond if risk continues to rally and equities take out their recent highs.