FOREX Newsletter
Pulse of the Market
· Greenback allude at reversal but downtrend seems to be strongly intact
· Euro unchanged against the U.S Dollar in spite of early tumble and uptrend intact
· British Pound tumbled following low CPI inflation and interest rate expectations
· Bank of Canada predictably shows little rush to raise rates
The Greenback resumed its slide against the Euro, Japanese Yen and Swiss Franc, after a brief rally on Monday. The Single Currency rose to a fresh 1 year high against the U.S Dollar as interest rate disparities continue to favor further gains in the currency. However the sell-off in the U.S Dollar was not universal as the drop in U.S equities dragged on risk appetite, helping the Greenback extend its gains against Cable, Loonie and Aussie. The Greenback rise will be totally dependent upon the degree of consumer spending. The labor market has gradually improved but job creation remains weak and opportunities are still very limited. Yesterday’s larger than expected trade deficit added pressure on the U.S Dollar. The Single Currency extended its gains against the Greenback, rising above 1.45 intraday in spite of the sharp decline in investor confidence. Although investors felt more confident about current market conditions, the recent interest rate hike by the ECB, the rise in commodity prices, strength of the Euro and Portugal’s official request for a bailout has made investors concerned about future economic activity. However with the IMF upgrading its growth forecasts for Germany this year and ECB officials talking about more rate hikes, the pullback in the Euro was nominal. Euro Zone industrial production numbers are due for release in today’s trading session. British Pound traded sharply lower against the U.S Dollar and Euro following weaker economic data. Consumer prices rose less than expected while consumer spending fell 3.5 percent according to the BRC Retail Sales report. This was the first time that CPI data missed market expectations since August of 2010, suggesting that inflationary price pressures in the U.K economy may have peaked. Japanese Yen strengthened against all of the major currencies as investors unwound their risk positions and rushed to safety after two shocks stronger than magnitude 6 hit Japan.
Time(GMT) | Economic Release | IM | Actual | Forecast | Prior |
00:30 | AUD Westpac Consumer Confidence Change (APR) | Medium | 1.2% | -2.4% | |
05:30 | EUR French Consumer Price Index (MoM) (MAR) | Low | 0.6% | 0.5% | |
08:30 | GBP Jobless Claims Change (MAR) | High | -3.0K | -10.2K | |
08:30 | GBP Claimant Count Rate (MAR) | Medium | 4.5% | 4.5% | |
11:00 | USD MBA Mortgage Applications (40641) | Low | -2.0% | ||
12:30 | USD Advance Retail Sales (MAR) | High | 0.5% | 1.0% | |
14:30 | CAD Monetary Policy Report | High | |||
18:00 | USD Fed Releases Beige Book Economic Survey | Medium | |||
23:01 | GBP Nationwide Consumer Confidence (MAR) | Medium | 40.0 | 38.0 |
Euro
The Single Currency reversed from yesterday’s lows in Asian trading session under 1.4400 to rally back above 1.4500 in European trading session. Investors ignored the risk aversion and reacted to comments that China would be supporting Spanish debt. German ZEW survey fell 6.5 points to 7.6 in April. Overall, the EUR/USD traded with a low of 1.4376 and a high of 1.4518 before closing the day around 1.4477 in the New York session.
Yen
The Japanese Yen was strong testing 83.50 Yen twice during yesterday’s trading session on concerns the nuclear crisis were worse than initially forecast and the market bought the safe haven. Intervention fears have subsided and U.S Dollar weakness or strength has begun to set the tone for the Japanese Yen. Overall, the USD/JPY traded with a low of 83.45 and a high of 84.77 before closing the day around 83.58 in the New York session.
British Pound
The British Pound ended yesterday’s trading session lower against the U.S Dollar as March Consumer Price Index fell to 4.0% vs. 4.4% previously. This caused the GBP/USD to fall to day lows in the lower 1.6200 region and EUR/GBP popped to multi month highs above 0.8900. Overall the GBP/USD traded with a low of 1.6226 and a high of 1.6347 before closing the day at 1.6260 in the New York session.
Australian Dollar
Australian Dollar came under heavy selling pressure with the AUD/JPY falling sharply in Asian trading session to 87.00 Yen and AUD/USD breaking briefly below 1.0400. The selling subsided and buyers re-entered the market in force and the Australian Dollar broke above 1.0500 at the height of Euro strength. Overall the AUD/USD traded with a low of 1.0436 and a high of 1.0522 before closing the day at 1.0436 in the New York session.
Euro-Yen
EUR/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The RSI is above 66 and lies above the neutral zone. Overall, the cross has lost 0.94%.
Sterling-Yen
Currently GBP/JPY is trading above 14, 50 and 100 days moving average. Fast stochastic is issuing bearish and MACD is indicating a bullish stance. The RSI is above 56 reading and lies above the neutral zone. The pair has lost 1.71%.
Aussie-Yen
Currently, the cross is trading above 14, 50 and 100 days moving average. Fast stochastic gives bearish and MACD is indicating a bullish stance. The RSI is above 61 reading and lies above the neutral region. The cross has lost 1.77%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bullish and MACD is also issuing a bullish signal. The RSI is above 67 reading and lies above the neutral region. The pair has gained 0.80%.
Sterling-Swiss
This cross is trading above below 14, 50 and 100 days moving average. Fast stochastic is issuing a bearish stance and MACD is also indicating a bearish tone. The RSI is above 38 and lies below the neutral region. The pair has lost 1.57%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.4254 | 1.4315 | 1.4396 | 1.4457 | 1.4538 | 1.4599 | 1.4680 |
USD/JPY | 81.78 | 82.61 | 83.10 | 83.93 | 84.42 | 85.25 | 85.74 |
GBP/USD | 1.6087 | 1.6157 | 1.6208 | 1.6278 | 1.6329 | 1.6399 | 1.6450 |
USD/CHF | 0.8782 | 0.8861 | 0.8915 | 0.8994 | 0.9048 | 0.9127 | 0.9181 |
USD/CAD | 0.9468 | 0.9511 | 0.9569 | 0.9612 | 0.9670 | 0.9713 | 0.9771 |
EUR/JPY | 117.71 | 118.92 | 119.96 | 121.17 | 122.21 | 123.42 | 124.46 |
GBP/JPY | 132.05 | 133.88 | 134.90 | 136.73 | 137.75 | 139.58 | 140.60 |
CHF/JPY | 90.94 | 91.70 | 92.44 | 93.20 | 93.94 | 94.70 | 95.44 |
AUD/JPY | 84.14 | 85.49 | 86.36 | 87.71 | 88.58 | 89.93 | 90.80 |
EUR/GBP | 0.8751 | 0.8786 | 0.8844 | 0.8879 | 0.8937 | 0.8972 | 0.9030 |
EUR/CHF | 1.2793 | 1.2875 | 1.2930 | 1.3012 | 1.3067 | 1.3149 | 1.3204 |
GBP/CHF | 1.4189 | 1.4365 | 1.4473 | 1.4649 | 1.4757 | 1.4933 | 1.5041 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
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