FOREX Newsletter
Pulse of the Market
· Greenback standing by for a bounce back as risk appetite comes to a standstill
· Euro rally may perhaps cut undersized if Greece bailout debate be unsuccessful
· Bank of England rate stance modestly changed in spite of elevated inflation statistics
· New Zealand Dollar become stable after strong retail sales and sentiment survey
The Greenback ended yesterday’s trading session on a mixed note. Better than expected economic data from the U.S and China made investors feel a bit less worried about the outlook for the global economy. Consumer spending in the U.S declined but not by as much as everyone had feared. Although consumer spending contracted for the first time since June 2010, the decline in retail sales was not as sharp as the market had feared. With job growth slowing as much as it did last month, everyone was worried that consumers would be very stingy in the month of May. U.S Consumer prices, the Empire State manufacturing survey, Treasury International Capital report and industrial production are scheduled for release today. The Euro traded higher against the U.S Dollar following improvement in risk appetite that helped the Euro to rise against the Greenback. There were no major Euro Zone economic reports released yesterday but Euro investors are hopeful that European officials will come up with an appetizing rescue plan for Greece. Finance Ministers in the European Union are working hard on crafting a deal that would hopefully not be considered a default by rating agencies. With only Euro Zone industrial production and French consumer prices on the calendar today, U.S data and the ongoing Greek account will remain the driving forces for the Euro. The British Pound ended the day almost unchanged against the U.S Dollar after rising as high as 1.6441. The intraday reversal in the currency reflects the lack enthusiasm for Cable. U.K consumer prices were right in line with expectations that meant slower price growth in the month of May. CPI rose 0.3 percent compared to 1.0 growth the prior month. Stable to softer inflationary pressures will keep the central bank comfortably on hold for the time being. Labor market numbers are due for release today and the number of people filing for unemployment benefits is expected to increase at a slower pace. The Japanese Yen weakened against all of the major currencies except for the Swiss Franc as risk appetite improved across the financial market. The Bank of Japan left interest rates unchanged. All three of the commodity currencies traded higher against the Greenback.
Time(GMT) | Economic Release | IMP | Actual | Forecast | Prior |
00:30 | Australia Westpac Consumer Confidence (JUN) | Low | -2.6% | -1.3% | |
03:00 | RBA Governor Stevens Speaks in Brisbane | High | |||
05:30 | French Consumer Price Index (MoM) (MAY) | Low | 0.1% | 0.3% | |
08:30 | U.K Jobless Claims Change (MAY) | High | 6.5K | 12.4K | |
11:00 | U.S MBA Mortgage Applications (JUN 10) | Low | -0.4% | ||
12:30 | U.S Consumer Price Index (MoM) (MAY) | Low | 0.1% | 0.4% | |
13:00 | U.S Net Long-term TIC Flows (APR) | Medium | $35.0B | $24.0B | |
13:15 | U.S Industrial Production (MAY) | Medium | 0.2% | 0.0% |
Euro
The Single Currency traded higher against the U.S Dollar but the gains were limited following Greece bailout and the major pulling back to opening levels late in U.S session. EUR/GBP bounced to above 0.8840 before once again sellers regained control to push the cross back to 0.8800. Overall, the EUR/USD traded with a low of 1.4377 and a high of 1.4496 before closing the day around 1.4440 in the New York session.
Yen
The Japanese Yen was under pressure as crosses rallied and USD/JPY moved higher after the Bank of Japan announced a new loan program for banks and the BOJ held rates at 0.1%. The ongoing support for deflation hit Japanese economy and seen as continuing for the anticipated future. Overall, the USD/JPY traded with a low of 80.07 and a high of 80.61 before closing the day around 80.47 in the New York session.
British Pound
The British Pound was unable to rally past the key resistance area at 1.6460 to 1.6500 even after stronger than rumored CPI numbers for May at 4.5% y/y. The pullback began on EUR/GBP buying and Cable slipped below 1.6400 to fall even lower in late U.S trade. Overall, the GBP/USD traded with a low of 1.6354 and a high of 1.6441 before closing the day at 1.6369 in the New York session.
Canadian Dollar
The Canadian Dollar gained against the U.S Dollar yesterday, buoyed by positive U.S and Chinese data that soothed fears about the direction of the global economy. Also, Canadian industrial capacity utilization rose in the first quarter as manufacturers showed renewed strength after a year of slowing growth. Overall, the USD/CAD traded with a low of 0.9673 and a high of 0.9770 before closing the day at 0.9687 in the New York session.
Australian Dollar
The Australian Dollar was strong in the risk on trading environment rallying with stocks above 1.0700 before reversing later on the Single Currency weakness. AUD/JPY was strong pushing above 86.00 Yen on the BOJ lending facility and threatening to resume its recent uptrend. Overall, the AUD/USD traded with a low of 1.0567 and a high of 1.0714 before closing the day at 1.0684 in the New York session.
Euro-Yen
EUR/JPY is trading below 14, 50 and above 100 days moving average. Fast stochastic is giving a bearish tone and MACD is issuing a bullish stance. The RSI is above 47 and lies below the neutral zone. Overall, the cross has gained 0.50%.
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 0.27%.
Aussie-Yen
Currently, the cross is trading above 14, 100 and below 50 days moving average. Fast stochastic gives bullish and MACD is indicating a bearish stance. The RSI is above 49 reading and lies below the neutral region. The pair has gained 1.11%.
Euro-Sterling
This cross is trading above 14, 50 and 100 days moving average. Fast stochastic is indicating a bearish and MACD is issuing a bullish signal. The RSI is above 50 reading and lies above the neutral region. The pair has gained 0.23%.
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 39 and lies below the neutral region. The pair has gained 0.96%.
Appendix
Daily Pivot Points | |||||||
Trading Range | |||||||
Contract | S3 | S2 | S1 | Pivot | R1 | R2 | R3 |
EUR/USD | 1.4260 | 1.4319 | 1.4379 | 1.4438 | 1.4498 | 1.4557 | 1.4617 |
USD/JPY | 79.62 | 79.84 | 80.16 | 80.38 | 80.70 | 80.92 | 81.24 |
GBP/USD | 1.6248 | 1.6301 | 1.6335 | 1.6388 | 1.6422 | 1.6475 | 1.6509 |
USD/CHF | 0.8271 | 0.8308 | 0.8381 | 0.8418 | 0.8491 | 0.8528 | 0.8601 |
USD/CAD | 0.9553 | 0.9613 | 0.9650 | 0.9710 | 0.9747 | 0.9807 | 0.9844 |
EUR/JPY | 113.95 | 114.60 | 115.40 | 116.05 | 116.85 | 117.50 | 118.30 |
GBP/JPY | 129.81 | 130.42 | 131.08 | 131.69 | 132.35 | 132.96 | 133.62 |
CHF/JPY | 93.70 | 94.40 | 94.79 | 95.49 | 95.88 | 96.58 | 96.97 |
AUD/JPY | 83.55 | 84.13 | 85.06 | 85.64 | 86.57 | 87.15 | 88.08 |
EUR/GBP | 0.8728 | 0.8755 | 0.8788 | 0.8815 | 0.8848 | 0.8875 | 0.8908 |
EUR/CHF | 1.1816 | 1.1913 | 1.2060 | 1.2157 | 1.2304 | 1.2401 | 1.2548 |
GBP/CHF | 1.3505 | 1.3583 | 1.3710 | 1.3788 | 1.3915 | 1.3993 | 1.4120 |
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