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Are Gold Miners Poised For A Breakout?

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Forex Trading Light as Traders Await U.S. Employment Report

The U.S. Dollar is finished mixed on light volume as traders evened up positions ahead of tomorrow's U.S. Unemployment Report. The Dollar opened weaker against most major Forex markets this morning but erased losses as the day wore on. Today's weaker than expected U.S. ISM Services Report helped the Dollar regain some of its losses as this report showed the U.S. economy was still weak. Some traders feel that weakness in the services sector will mean that tomorrow's unemployment report will show more job losses than estimated. Yesterday's ADP employment report was worse than estimated. This too weighed on traders' minds.

The GBP USD opened up strong but gave back some of its gains by the close on position evening. This market has firmed up over the last two days because of oversold conditions and a better than expected U.K. Services Report.

This morning the European Central Bank announced that its benchmark interest rate would remain at 1.0% as expected. ECB President Trichet said that the road to recovery would be "bumpy" while explaining why the central bank is in no hurry to withdraw its emergency stimulus. After an early morning gain, the Euro lost ground to the Dollar and finished lower.

The close in the EUR USD was slightly above a 50% level at 1.4260. Breaking under this level will put the EUR USD on the bear side of a retracement zone. Basically, this market is trading inside of its August range of 1.4447 to 1.4045.

The USD CAD finished the day lower. Steady to lower crude oil and a gain in equity markets helped to support the Canadian Dollar today. Trading was light ahead of tomorrow's U.S. employment report.

The USD JPY closed up on the day. Oversold conditions and a firm stock market helped boost interest in the Dollar after several days of weakness. Position evening ahead of tomorrow's U.S. Non-Farm Payrolls Report also contributed to the Dollar's strength.

Currently the Yen is battling the Dollar for safe haven status. Today's weaker than expected U.S. ISM Services Report helped draw interest back to the Dollar. Tomorrow's report should trigger a volatile move in the USD JPY.

Demand was a little stronger today for the higher yielding NZD USD and AUD USD, but overall these two markets remain rangebound. Yesterday it was reported that the Australian economy grew more than expected but today a report indicated that the trade deficit widened. Exports fell and imports increased because stimulus plans increased domestic demand. Traders are anticipating a rate hike by the Reserve Bank of Australia before the end of the year. Tomorrow's U.S. employment report will dictate whether traders will renew their quest for higher yielding currencies or decide that safety is best.


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