·
Greenback wandering prior to key budget votes
and first quarter GDP release
·
Single Currency stumbled after sentiment data
unpleasant and Italian auction struggles
·
British Pound captivating signals further from
risk trends than economic data
·
Japanese Yen slides after employment, spending
and production data disheartened
The U.S
Dollar ended yesterday’s trading session on a mixed note. Based upon the price
action in the foreign market, in the view of market players everyone who wants
to sell U.S Dollars prior to the debt ceiling votes has already been done.
Jobless claims fell to 398k from an upwardly revised 422k the previous week
which is extremely promising for the labor market. Pending home sales beat
expectations, rising 2.4 percent in the month of June but the housing market in
general remains weak. Second quarter GDP numbers are scheduled for release
today along with the Chicago PMI report and the final University of Michigan
Consumer Sentiment survey for the month of July. Second quarter growth is
expected to slow from an annualized pace of 1.9 to 1.8 percent. Consumer
spending and trade activity weakened between April and June which confirms that
growth of the economy lost momentum in the second quarter. As for manufacturing
activity in the Chicago region, a rebound is expected given the improvements
seen in New York, Philadelphia and Dallas. The Euro lost value against the U.S
Dollar for the second day in a row. Amongst the high beta currencies, the
EUR/USD has performed the worst in the past two trading sessions. The Euro
slipped approximately 200 pips in 2 days. Weaker economic data out of Euro Zone
and rising CDS spreads has spelled big trouble for the Single Currency. The
number of people filing for unemployment claims in Germany declined less than
expected, although it’s considered that the 11k drop still very good, the Euro
came under heavy selling after the confidence numbers showed a sharp
deterioration in sentiment. The Swiss Franc rose to another record high against
the U.S Dollar before rebounding. USD/CHF held near its lows for the past 3
trading days and the outcome of the debt ceiling discussions in the U.S will
determine whether this is a pause or bottom. The British Pound held steady
against the U.S Dollar but strengthened against the Euro despite weaker
economic data. The fact that investors completely ignored the soft CBI
Distributive Trades survey shows that economic data is not their top priority.
Both the Euro Zone and the U.S are up to their neck in sovereign debt concerns
and in that light, Pound has benefitted. The Japanese Yen strengthened across
the board yesterday. With the U.S debt crisis dominating the headlines, the Yen
is still being looked at as safe haven currency.
Time(GMT)
|
Economic Release
|
IMP
|
Actual
|
Forecast
|
Prior
|
05:00
|
Japan Annualized Housing Starts (JUN)
|
Medium
|
0.809M
|
0.815M
|
|
06:00
|
German Retail Sales (MoM) (JUN)
|
Low
|
1.7%
|
-2.8%
|
|
08:30
|
U.K Mortgage Approvals (JUN)
|
Medium
|
46.0K
|
45.9K
|
|
12:30
|
U.S Gross Domestic Product (Annualized) (2Q)
|
High
|
1.8%
|
1.9%
|
|
12:30
|
Canada Gross Domestic Product (MoM) (MAY)
|
Medium
|
0.1%
|
0.0%
|
|
13:45
|
U.S Chicago Purchasing Manager (JUL)
|
Medium
|
60.0
|
61.1
|
|
13:55
|
U.S U. of Michigan Confidence (JUL)
|
Medium
|
64.0
|
63.8
|
Euro
The
Single Currency traded lower against the U.S Dollar. Concerns about the EU debt
crisis continue to remain close to the surface with apprehension yesterday
after weak Italy bonds. German Unemployment fell 11k in July against -13k
previously. The EUR/USD found support under 1.4300. Overall, the EUR/USD traded
with a low of 1.4253 and a high of 1.4400 before closing the day around 1.4329
in the New York session.
Yen
The
Japanese Yen failed to regain 78.00 Yen in yesterday’s trading session even
with some moderate U.S Dollar strength and ended near lows with crosses
dragging the major lower. EUR/JPY tracked towards 110.00 the low from the
recent Greece crisis. Overall, the USD/JPY traded with a low of 77.61 and a
high of 78.01 before closing the day around 77.64 in the New York session.
British
Pound
The
British Pound outperformed most against the other risk currencies in
yesterday’s trading session finding support under 1.6300 and EUR/GBP falling to
0.8750. CBI Realized Sales at -5 vs. 0 forecast UK economy struggling to gain
traction. Overall, the GBP/USD traded with a low of 1.6293 and a high of 1.6382
before closing the day at 1.6372 in the New York session.
Canadian Dollar
The
Canadian Dollar edged lower against the U.S Dollar, trading in a tight range as
investors awaited a crucial vote in the United States on a bill to cut the
deficit. The Loonie had strengthened earlier in the day but sold off slightly
as a vote loomed in the U.S where lawmakers are working to compromise on a
deficit reduction plan. Overall, USD/CAD traded with a low of 0.9456 and a high
of 0.9521 before closing the day at 0.9491 in the New York session.
Australian Dollar
The Australian
Dollar failed to maintain strength as the risk aversion overwhelmed and pushed
the Aussie back from fresh record highs to test 1.1000. The Australian Dollar
was also pressured as investors waited to see whether U.S lawmakers will be
able to agree on a plan to raise the country’s borrowing limit and avoid a catastrophic
default. Overall, the AUD/USD traded with a low of 1.0975 and a high of 1.1074
before closing the day at 1.1004 in the New York session.
Euro-Yen
EUR/JPY is trading below 14, 50 and 100
days moving average. Fast stochastic is giving a bullish tone and MACD is issuing
a bearish stance. The RSI is above 36 and lies below the neutral zone. Overall,
the cross has lost 0.66%.
Sterling-Yen
Currently GBP/JPY is trading below 14,
50 and 100 days moving average. Fast stochastic is issuing bullish and MACD is
also indicating a bullish stance. The RSI is above 39 reading and lies below the
neutral zone. The pair has lost 0.15%.
Aussie-Yen
Currently, the cross is trading above
14 and below 50, 100 days moving average. Fast stochastic gives bullish and
MACD is also indicating a bullish stance. The RSI is above 48 reading and lies
below the neutral region. The pair has lost 0.57%.
Euro-Sterling
This cross is trading above below 14,
50 and 100 days moving average. Fast stochastic is indicating a bullish and
MACD is issuing a bearish signal. The RSI is above 42 reading and lies below
the neutral region. The pair has lost 0.51%.
Sterling-Swiss
This cross is trading below 14, 50 and 100
days moving average. Fast stochastic is issuing a bearish stance and MACD is indicating
a bullish tone. The RSI is above 35 and lies below the neutral region. The pair
has gained 0.18%.
Appendix
Daily Pivot Points
| |||||||
Trading Range
| |||||||
Contract
|
S3
|
S2
|
S1
|
Pivot
|
R1
|
R2
|
R3
|
EUR/USD
|
1.4108
|
1.4180
|
1.4255
|
1.4327
|
1.4402
|
1.4474
|
1.4549
|
USD/JPY
|
77.10
|
77.35
|
77.50
|
77.75
|
77.90
|
78.15
|
78.30
|
GBP/USD
|
1.6227
|
1.6260
|
1.6316
|
1.6349
|
1.6405
|
1.6438
|
1.6494
|
USD/CHF
|
0.7926
|
0.7958
|
0.7982
|
0.8014
|
0.8038
|
0.8070
|
0.8094
|
USD/CAD
|
0.9393
|
0.9424
|
0.9458
|
0.9489
|
0.9523
|
0.9554
|
0.9588
|
EUR/JPY
|
109.42
|
110.12
|
110.69
|
111.39
|
111.96
|
112.66
|
113.23
|
GBP/JPY
|
126.06
|
126.37
|
126.76
|
127.07
|
127.46
|
127.77
|
128.16
|
CHF/JPY
|
96.08
|
96.40
|
96.67
|
96.99
|
97.26
|
97.58
|
97.85
|
AUD/JPY
|
84.33
|
84.81
|
85.13
|
85.61
|
85.93
|
86.41
|
86.73
|
EUR/GBP
|
0.8655
|
0.8695
|
0.8723
|
0.8763
|
0.8791
|
0.8831
|
0.8859
|
EUR/CHF
|
1.1307
|
1.1364
|
1.1420
|
1.1477
|
1.1533
|
1.1590
|
1.1646
|
GBP/CHF
|
1.2946
|
1.2992
|
1.3052
|
1.3098
|
1.3158
|
1.3204
|
1.3264
|
Sources:
News, Charts & Quotes (Courtesy: Reuters, US Department Of Treasury)
