FOREX Newsletter
Pulse of the Market
· The Greenback fell for the first time in the last four trading sessions as risk trends grasp
· Single Currency managed an advance against safe havens despite S&P downgrades Greece
· The British Pound’s reclaimed move could be reversed with upcoming CPI data
· The Canadian Dollar on the edge of turnaround adjacent to oil’s holds at $95 a barrel
The Greenback lost value against every major currency in yesterday’s trading session with the exception of the New Zealand Dollar. Yesterday was a quiet trading session in the financial markets but starting but it will be a very busy trading week ahead. Yesterday’s shallow recovery could easily turn into losses if Chinese or U.S economic data surprises to the downside. There may be very few reasons for investors to buy U.S Dollars but for the benefit of Dollar’s safe haven status. Everyone knows that the U.S recovery is losing momentum and even Fed Chairman Ben Bernanke has expressed his reservations about the outlook for the U.S economy. So if retail sales which are scheduled for release today are weak, it will only reinforce the market’s belief that the Fed will not raise interest rates before the end of the year. Retail sales are expected to fall by 0.5 percent, due largely to weaker demand for autos. If retail sales meets expectations or comes in only slightly weaker, there could be a nominal impact on the Greenback. The Euro traded higher against the U.S Dollar, shrugging off Standard & Poor’s downgrade of Greek debt. Standard & Poor’s had Greek debt rated higher than its peers which is why the adjustment was not extremely surprising. However, Greece now has the lowest credit rating in the world and is four notches above default. Downgrades by rating agencies only make the problems worse for Greece by making it impossible for them to raise funds and increasing the pressure on European leaders to come up with a rescue plan that not only provides Greece with additional support. The British Pound extended its gains against the U.S Dollar and Euro ahead of today’s consumer price release. So far, there is little evidence that inflation expectations are well-established which part of the reason is why the central bank has not been in a rush to raise rates. If consumer price growth eases, then the Bank of England has more time, but if CPI growth accelerates, the BoE could be prompted to act sooner rather than later. The Japanese Yen weakened against all of the major currencies except the U.S and New Zealand Dollar as Japanese economic data continued to show signs of weakness.
| Time(GMT) | Economic Release | IMP | Actual | Forecast | Prior |
| 01:30 | Australia NAB Business Confidence (MAY) | Medium | 6 | | 7 |
| 03:40 | Bank of Japan Rate Decision (JUN 14) | High | 0.1% | 0.1% | 0.1% |
| 04:30 | Japan Industrial Production (MoM) (APR) | Medium | | | 1.0% |
| 08:30 | U.K Consumer Price Index (MoM) (MAY) | Medium | | 0.2% | 1.0% |
| 08:30 | U.K Retail Price Index (MAY) | Medium | | 235.3 | 234.4 |
| 12:30 | U.S Advance Retail Sales (MAY) | High | | -0.5% | 0.5% |
| 12:30 | U.S Producer Price Index (MoM) (MAY) | Low | | 0.1% | 0.8% |
| 23:01 | U.K Nationwide Consumer Confidence (MAY) | Medium | | 45 | 43 |
Euro
The Single Currency was able to rally despite Greece was downgraded to the lowest possible rating with the slew of recent downgrades no longer having a major impact. The late rally in the day from U.S stocks allowed short covering back above 1.4400 but the outlook is still very negative while so many issues remain unresolved. Overall, the EUR/USD traded with a low of 1.4321 and a high of 1.4429 before closing the day around 1.4411 in the New York session.
Yen
The Japanese Yen was able to push higher in the Asian trading session before reversing back down to 80.00 Yen following Dollar weakness late in the day. Most crosses ended slightly higher on the positive bounce off lows in stock markets. EUR/JPY is a very important cross and has been under heavy selling pressure in recent sessions. Overall, the USD/JPY traded with a low of 80.10 and a high of 80.68 before closing the day around 80.23 in the New York session.
British Pound
The British Pound was well supported not just on EUR/GBP selling but on broad support for the Cable having an exceptional positive day. Some Support was seen on comments from BOE member Weale that a preventive rate hike now would help the central bank achieve inflation targets later. Overall, the GBP/USD traded with a low of 1.6219 and a high of 1.6389 before closing the day at 1.6375 in the New York session.
Canadian Dollar
The Canadian Dollar begins the week higher against nearly all of its major counterparts, supported by rising equities and after last week's strong labor market data. The relatively strong Canadian economy has kept the Loonie supported near its monthly highs. Economic data will be limited this week from Canada. Overall, the USD/CAD traded with a low of 0.9750 and a high of 0.9796 before closing the day at 0.9759 in the New York session.
Australian Dollar
The Australian Dollar was quiet in Asian and European trading sessions before snapping higher with the U.S stock market bounce late in the day. The outlook is closely tied with global stocks markets and how well the Chinese economy can endure its own economic challenges. Overall, the AUD/USD traded with a low of 1.0527 and a high of 1.0636 before closing the day at 1.0601 in the New York session.
Euro-Yen
EUR/JPY is trading below 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 46 and lies below the neutral zone. Overall, the cross has gained 0.48%.
Sterling-Yen
Currently GBP/JPY is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is indicating a bearish stance. The RSI is above 46 reading and lies below the neutral zone. The pair has gained 0.84%.
Aussie-Yen
Currently, the cross is trading below 14, 50 and above 100 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 41 reading and lies below the neutral region. The pair has gained 0.41%.
Euro-Sterling
This cross is trading below 14, 50 and above 100 days moving average. Fast stochastic is indicating a bearish and MACD is issuing a bullish signal. The RSI is above 48 reading and lies below the neutral region. The pair has lost 0.35%.
Sterling-Swiss
This cross is trading below 14, 50 and 100 days moving average. Fast stochastic is issuing a bullish stance and MACD is indicating a bearish tone. The RSI is above 32 and lies below the neutral region. The pair has gained 0.25%.
Appendix
| Daily Pivot Points | |||||||
| | Trading Range | | |||||
| Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
| EUR/USD | 1.4237 | 1.4279 | 1.4345 | 1.4387 | 1.4453 | 1.4495 | 1.4561 |
| USD/JPY | 79.41 | 79.76 | 79.99 | 80.34 | 80.57 | 80.92 | 81.15 |
| GBP/USD | 1.6096 | 1.6158 | 1.6266 | 1.6328 | 1.6436 | 1.6498 | 1.6606 |
| USD/CHF | 0.8210 | 0.8281 | 0.8325 | 0.8396 | 0.8440 | 0.8511 | 0.8555 |
| USD/CAD | 0.9695 | 0.9722 | 0.9741 | 0.9768 | 0.9787 | 0.9814 | 0.9833 |
| EUR/JPY | 114.45 | 114.73 | 115.18 | 115.46 | 115.91 | 116.19 | 116.64 |
| GBP/JPY | 129.53 | 129.91 | 130.65 | 131.03 | 131.77 | 132.15 | 132.89 |
| CHF/JPY | 94.11 | 94.56 | 95.20 | 95.65 | 96.29 | 96.74 | 97.38 |
| AUD/JPY | 83.73 | 84.09 | 84.57 | 84.93 | 85.41 | 85.77 | 86.25 |
| EUR/GBP | 0.8735 | 0.8765 | 0.8782 | 0.8812 | 0.8829 | 0.8859 | 0.8876 |
| EUR/CHF | 1.1862 | 1.1932 | 1.1997 | 1.2067 | 1.2132 | 1.2202 | 1.2267 |
| GBP/CHF | 1.3503 | 1.3558 | 1.3632 | 1.3687 | 1.3761 | 1.3816 | 1.3890 |
Sources: News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
No comments:
Post a Comment