FOREX Newsletter
Pulse of the Market
· Reliance in a Greenback rally is hard to congregate without extensive risk aversion
· Euro at the top of the primary risk listing as the EU talk about Greece and Portugal
· Japanese Yen rose relentlessly close to testing the G7’s determination for ‘Stability’
· Canadian Dollar overlooked for event risk but volatility prospect still situates low
The Greenback ended Friday’s trading session higher against most of the major currencies, after US inflation data reported its highest level in two and a half years. The Labor Department reported its Consumer Price Index increased 0.4% m/m and 3.2% y/y, highest since October 2008. The core Consumer Price Index, which excludes food and energy costs, rose slightly to 0.2% m/m and 1.3% y/y, highest since February 2010. As investors pay close attention to the CPI data in efforts to gauge the rate of inflation, most are not convinced that the reading is enough to prompt an immediate response from the Federal Reserve. The Single Currency pull back from its gains against the U.S Dollar even as strong economic growth figures in the Euro Zone encouraged bets of a second rate hike as early as June. The Euro Zone economic output grew more than expected with Germany and France leading the league with GDP growth reaching 1.5% and 1.0% respectively. In all, the Euro Zone expanded 0.8% in first quarter, higher than the economist's forecasted 0.6% growth. Regardless of the unexpected expansion, investors have refocused on the increasing debt levels in the Euro Zone. The British Pound slid further against the U.S Dollar as construction and employment data in the U.K showed uninspiring results. The Office for National Statistics revised its construction output to -4.0% in first quarter, from the previous -4.7%. However, the data is still the largest quarterly decline since first quarter of 2009. With limited relevant data in the coming days, investors are looking forward to the minutes of the BoE MPC meeting on May 18th, which gives full account of policy discussions and the inflationary outlook of the economy. The Japanese Yen continued its gains against the U.S Dollar as Japan's current account surplus tumbled in March y/y. The Ministry of Finance reported Japan's surplus fell 34.3% compared with a median forecast of a 31.3% drop which followed a 3.0% rise in the year to February. In addition, bank lending in Japan fell to its slowest rate in 17 months this April even as companies sought funds to recover from the massive earthquake that struck on March 11.
Time(GMT) | Economic Release | IMP | Actual | Forecast | Prior |
U.K Nationwide Consumer Confidence (APR) | Medium | 46 | 44 | ||
05:00 | Japan Consumer Confidence (APR) | Medium | 36.7 | 38.6 | |
09:00 | Euro Zone Consumer Price Index (MoM) (APR) | Medium | 0.6% | 1.4% | |
09:00 | Euro Zone Trade Balance (Euros) (MAR) | Medium | 2.0B | -1.5B | |
12:30 | U.S Empire Manufacturing (MAY) | Medium | 19.70 | 21.70 | |
13:00 | U.S Fed Chairman Ben Bernanke Speaks on U.S. Economy | High | |||
13:00 | U.S Total Net TIC Flows (MAR) | Medium | $97.7B | ||
15:00 | EU Finance Ministers Summit in Brussels | High |
Euro
The Single Currency slumped during the last week, falling to the lowest level in six weeks against the U.S Dollar, as Greece and its debt returned to the forefront of news and discussions, making investors unwilling to invest in the European Single Currency. Overall, the EUR/USD traded with a low of 1.4065 and a high of 1.4338 before closing the day around 1.4106 in the New York session.
Yen
The Japanese Yen was broadly higher with the Nikkei's decline, which encouraged investors to buy back the safe-haven currency. And the recent sharp drop in commodity prices are also factoring into the Yen's strength. Investors' negative sentiment for Japanese banks simultaneously pushed the Japanese Yen broadly higher. Overall, the USD/JPY traded with a low of 80.33 and a high of 81.08 before closing the day around 80.80 in the New York session.
British Pound
The British Pound weakened after data showed economic growth in Germany and France exceeded estimates and a report said U.K living standards will fall, spurring bets that Euro Zone interest rates will outpace increases in U.K. Cable depreciated against the majority of its 16 most traded counterparts. Overall, the GBP/USD traded with a low of 1.6145 and a high of 1.6307 before closing the day at 1.6191 in the New York session.
Canadian Dollar
The Canadian Dollar closed lower on Friday as the U.S Dollar strengthened in the midst of fresh worries about the European debt crisis. Canadian Dollar was also pressured after wariness about the direction of commodities linger. Overall, the USD/CAD traded with a low of 0.9602 and a high of 0.9742 before closing the day at 0.9683 in the New York session.
Australian Dollar
The Australian Dollar remained under pressure against the U.S Dollar after the pull back of the Euro and the unexpectedly weak jobs data from Australia which was released on Thursday. Volatile commodity prices and little global expansion has added pressure to the Aussie. Overall, the AUD/USD traded with a low of 1.0519 and a high of 1.0715 before closing the day at 1.0565 in the New York sessionEuro-Yen
EUR/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is giving a bearish tone and MACD is also issuing a bearish stance. The RSI is above 35 and lies below the neutral zone. Overall, the cross has lost 1.12%.
Sterling-Yen
Currently GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bearish and MACD is also indicating a bearish stance. The RSI is above 37 reading and lies below the neutral zone. The pair has lost 0.77%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and above 100 days moving average. Fast stochastic gives bearish and MACD is also indicating a bearish stance. The RSI is above 42 reading and lies below the neutral region. The pair has lost 1.20%.
Euro-Sterling
This cross is trading below 14, 50 and above 100 days moving average. Fast stochastic is indicating a bearish and MACD is also issuing a bearish signal. The RSI is above 42 reading and lies below the neutral region. The pair has lost 0.34%.
Sterling-Swiss
This cross is trading above 14 and below 50, 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is also indicating a bullish tone. The RSI is above 46 and lies below the neutral region. The pair has gained 0.33%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.4164 | 1.4246 | 1.4383 | 1.4465 | 1.4602 | 1.4684 | 1.4821 |
USD/JPY | 81.32 | 81.78 | 82.17 | 82.63 | 83.02 | 83.48 | 83.87 |
GBP/USD | 1.6212 | 1.6259 | 1.6331 | 1.6378 | 1.6450 | 1.6497 | 1.6569 |
USD/CHF | 0.8707 | 0.8791 | 0.8834 | 0.8918 | 0.8961 | 0.9045 | 0.9088 |
USD/CAD | 0.9424 | 0.9460 | 0.9491 | 0.9527 | 0.9558 | 0.9594 | 0.9625 |
EUR/JPY | 116.52 | 117.38 | 118.64 | 119.50 | 120.76 | 121.62 | 122.88 |
GBP/JPY | 133.64 | 134.15 | 134.79 | 135.30 | 135.94 | 136.45 | 137.09 |
CHF/JPY | 90.87 | 91.29 | 92.13 | 92.55 | 93.39 | 93.81 | 94.65 |
AUD/JPY | 85.68 | 86.24 | 87.34 | 87.90 | 89.00 | 89.56 | 90.66 |
EUR/GBP | 0.8696 | 0.8737 | 0.8794 | 0.8835 | 0.8892 | 0.8933 | 0.8990 |
EUR/CHF | 1.2776 | 1.2831 | 1.2862 | 1.2917 | 1.2948 | 1.3003 | 1.3034 |
GBP/CHF | 1.4386 | 1.4472 | 1.4518 | 1.4604 | 1.4650 | 1.4736 | 1.4782 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
No comments:
Post a Comment