Forex Market Update - page 8
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Forex Market Update 06Mai14
This morning, the greenback is trading lower against most of the major currencies.
The EUR is trading higher against its US counterpart, buoyed by strong employment figures from Spain and after Euro-zone’s composite PMI rose at its fastest pace in almost three years in April while retail sales in the region posted a surprise month-on-month rise in March.
Late Monday, the ECB’s Yves Mersch hinted that the central bank did not see any deflationary risk in the Euro-zone economy over the medium term, despite the data suggesting otherwise.
In Australia, the RBA kept its benchmark interest rate unchanged at record low 2.5% for the ninth straight month and reiterated its earlier view for interest rate to remain stable for some more time in the economy. Separately, the RBA Governor, Glenn Stevens noted some improvement in the nation’s labor market while adding that local employment market was still quite weak and that the exchange rate at current level was still quite high.
In yesterday’s New York session, the greenback traded mostly higher against the key currencies, benefited from an ISM report that showed activities in the US non-manufacturing sector gained momentum in April. However, a separate report from Markit Economics revealed that growth in US services sector slowed slightly in last month.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3926 against the USD, 0.37% higher from the New York close, buoyed by the recent upbeat employment data from Spain and strong Euro-zone’s Markit PMI and retail sales data for March. During the session, the pair traded at a high of 1.3932 and a low of 1.3874. Yesterday, the EUR traded 0.06% lower against the USD in the New York session, and closed at 1.3875.
The pair is expected to find its first support at 1.3887 and first resistance at 1.3949.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6949 against the USD, 0.48% higher from the New York close, benefiting from a report that highlighted a four month high reading in UK Markit service PMI for April. During the session, the pair traded at a high of 1.6953 and a low of 1.6869. Yesterday, the British Pound traded flat versus the Dollar in the New York session, and closed at 1.6868.
The pair is expected to find its first support at 1.6884 and first resistance at 1.6984.
USD JPY
The USD is trading at 101.93 against the JPY at 9:40 GMT this morning, 0.22% lower from the New York close. The JPY is trading higher, extending its yesterday’s gain on the back of strong demand for safe-haven assets. Looking forward, traders would eye the minutes from the BoJ’s latest policy meeting for further cues in the currency. During the session, the pair traded at a high of 102.21 and a low of 101.95. In the New York session yesterday, the USD traded 0.23% higher against the JPY, and closed at 102.15.
The pair is expected to find its first support at 101.81 and first resistance at 102.13.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8741 against the Swiss Franc, 0.42% lower from the New York close. During the session, the pair traded at a high of 0.8782 and a low of 0.8743. In the New York session yesterday, the USD traded 0.11% higher against the CHF, and closed at 0.8778.
The pair is expected to find its first support at 0.8723 and first resistance at 0.8771.
USD CAD
At 9:40 GMT, the USD is trading at 1.0945 against the CAD, 0.10% lower from the New York close. Market participants keenly await Canada’s trade balance and Ivey PMI data for further guidance in the Loonie. During the session, the pair traded at a high of 1.0962 and a low of 1.0947. Yesterday, the USD traded 0.29% lower against the CAD in the New York session, and closed at 1.0956.
The pair is expected to find its first support at 1.0926 and first resistance at 1.0978.
AUD USD
The AUD is trading at 0.9311 against the USD, at 9:40 GMT this morning, 0.37% higher from the New York close. Earlier today, the RBA kept its interest rate unchanged at 2.5% for the ninth month in a row in May and reiterated a period of stability in the same. Separately, data showed that trade surplus in Australia narrowed more-than-expected to a seasonally adjusted $731 million in March. During the session, the pair traded at a high of 0.9319 and a low of 0.9278. AUD traded 0.14% higher against the USD in the New York session, and closed at 0.9277.
The pair is expected to find its first support at 0.9271 and first resistance at 0.9335.
Gold
At 9:40 GMT, Gold is trading at $1309.30 per ounce, marginally lower from the New York close. However, earlier, gold prices advanced as mounting tensions in Ukraine bolstered the safe-haven appeal of the metal. This morning, Gold traded at a high of $1314.30 and a low of $1308.00 per ounce. In the New York session yesterday, the yellow metal traded 0.39% lower, and closed at $1309.70.
Gold has its first support at $1306.27 and first resistance at $1314.07.
Silver
Silver is trading at $19.64 per ounce, 0.28% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.70 and a low of $19.51. Silver traded 0.61% lower against the USD in the New York session, and closed at $19.58, tracking losses in the prices of gold.
Silver has its first support at $19.51 and first resistance at $19.75.
Crude Oil
At 9:40 GMT, Oil is trading at $99.72 per barrel, 0.40% higher from the New York close. This morning, Oil traded at a high of $99.86 and a low of $99.32. Yesterday, Oil traded 0.71% lower in the New York session, and closed at $99.34, as lingering concerns on demand-outlook in China and easing worries on Libya’s supply prospect, weighed on the prices of crude oil. However, escalating violence in Ukraine kept the commodity’s losses in check.
It has its first support at $98.97 and first resistance at $100.41.
Economic Snapshot
OECD trimmed its global growth forecast for 2014
The Organisation for Economic Cooperation and Development (OECD) lowered its 2014 global economic growth forecast to 3.4% from 3.6% it had projected in November 2013, while maintaining its 2015 growth estimate at 3.9%.
UK services PMI rose more than expected in April
Markit Economics reported that the services Purchasing Managers’ Index (PMI) in UK rose to a level of 58.7 in April, following a reading of 57.6 in the previous month. Market had expected the index to rise to a reading of 57.8 in April.
UK official reserves rose in April
The Bank of England (BoE) reported that the UK’s official reserves rose by $139.0 million in April, compared to fall of $660.0 million reported in the previous month.
Euro-zone final services PMI rose in line with the preliminary estimate in April
Markit Economics reported that the final services Purchasing Managers’ Index (PMI) in the Euro-zone rose to a reading of 53.1 in April, in line with the flash estimate and compared to the final reading of 52.2 in the previous month. Additionally, the final composite PMI in the Euro-zone increased to a level of 54.0 in April, compared to the final reading of 53.1 reported in the previous month.
Euro zone retail sales rose unexpectedly in March
On a monthly basis, retail sales in the Euro-zone rose 0.3% in March, following a revised increase of 0.1% recorded in the preceding month. Markets were expecting retail sales to drop 0.2% in March.
Germany services PMI rose less than the preliminary estimate in April
Markit Economics reported that the final services Purchasing Managers’ Index (PMI) in Germany increased to a level of 54.7 in April, less than the preliminary estimate of 55.0 and compared to the final reading of 53.0 in the previous month.
France services PMI declined less than the preliminary estimate in April
Markit Economics reported that the final services Purchasing Managers’ Index (PMI) in France dropped to a reading of 50.4 in April, less than the preliminary estimate of 50.3 and compared to the final reading of 51.5 reported in the previous month.
Italy services PMI rose in April
Markit Economics reported that the services Purchasing Managers’ Index (PMI) in Italy increased to a reading of 51.1 in April, from a reading of 49.5 in the previous month.
Unemployment in Spain declined in April
Unemployed persons in Spain fell by 111.6K in April, compared to a fall of 16.6K reported in the previous month.
Australia’s trade surplus narrowed in March
Australia’s seasonally adjusted trade surplus narrowed to A$731.0 million in March, compared to a revised surplus of A$1257.0 million recorded in the previous month.
RBA maintained its key interest rate steady
The Reserve Bank of Australia (RBA) announced to keep its key interest rate unchanged at 2.5%, in line with market expectations. The RBA Governor, Glenn Stevens, reiterated that interest rates are likely to remain at the current levels in the near future, given the improving domestic and global economic prospects.
Good trades.
Forex Market Update 08Mai14
This morning, the greenback is trading lower against most of the major currencies, ahead of the US weekly employment data and few planned speeches from top Fed officials.
The EUR and the GBP are trading higher, ahead of the ECB and the BoE’s monetary policy decision. Late Wednesday, in the Euro-zone, France Economy Minister, Arnaud Montebourg opined that a 10.0% weakness in the Euro could propel 0.6 percentage points growth in the French GDP over a year and twice as much over three years.
Demand for the AUD rose after unemployment rate in Australia surprisingly stood pat at previous month’s level of 5.8% as the economy added more-than-expected 14,200 jobs in April. Positive sentiment was also fuelled after trade surplus in Australia’s largest trading partner, China, expanded beyond analysts’ expectations for April.
Yesterday, the US traded higher against the key currencies in the New York session, after the Fed Chief, Janet Yellen projected the US economy to shrug off the dullness from the winter freeze and register a “solid growth” in the second quarter. However, she also opined that the economy was still in need of the central bank’s stimulus measure to completely eradicate slackness in its jobs markets.
During his speech in London, Japan’s Economy Minister, Akira Amari, citing a significant improvement in the nation’s labor market, highlighted his confidence in the growth of the Japanese economy.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3944 against the USD, 0.24% higher from the New York close, ahead of the ECB’s interest rate decision and press conference by Mario Draghi. In economic news, industrial production in Germany unexpectedly declined for the first time in five months in March. During the session, the pair traded at a high of 1.3948 and a low of 1.3908. Yesterday, the EUR traded 0.14% lower against the USD in the New York session, and closed at 1.3911.
The pair is expected to find its first support at 1.3917 and first resistance at 1.3960.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6963 against the USD, 0.05% higher from the New York close, as traders await the BoE’s decision on its monetary policy. Earlier today, the RICS reported that house price balance in the UK economy eased last month but still remained close to November's 11-year high. Separately, Halifax also reported that its index on Britain house prices fell 0.2% (MoM) in March. During the session, the pair traded at a high of 1.6969 and a low of 1.6948. Yesterday, the British Pound traded 0.11% lower versus the Dollar in the New York session, and closed at 1.6954.
The pair is expected to find its first support at 1.6943 and first resistance at 1.6982.
USD JPY
The USD is trading at 101.81 against the JPY at 9:40 GMT this morning, 0.07% lower from the New York close. During the session, the pair traded at a high of 101.97 and a low of 101.75. In the New York session yesterday, the USD traded 0.06% higher against the JPY, and closed at 101.88. Late Wednesday, Japan’s Economy Minister, Akira Amari applauded BoJ’s effort to revive growth in the Japanese economy and stated that recent policy reforms have contributed a significant improvement in the nation’s labor markets
The pair is expected to find its first support at 101.54 and first resistance at 102.06.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8741 against the Swiss Franc, 0.25% lower from the New York close. On the economic front, Swiss consumer price index rose 0.1% (MoM) in April, in line with market estimates while the SECO consumer climate in Switzerland registered an unexpected fall in the first quarter of 2014. During the session, the pair traded at a high of 0.8767 and a low of 0.8742. In the New York session yesterday, the USD traded 0.18% higher against the CHF, and closed at 0.8763.
The pair is expected to find its first support at 0.8730 and first resistance at 0.8759.
USD CAD
At 9:40 GMT, the USD is trading at 1.0888 against the CAD, 0.09% lower from the New York close. During the session, the pair traded at a high of 1.0905 and a low of 1.0883. Yesterday, the USD ended the New York session flat against the CAD, and closed at 1.0898. However, earlier, the Canadian Dollar came under pressure after data showed that Canadian monthly building permits fell unexpectedly to the lowest level since February 2013 in March.
The pair is expected to find its first support at 1.0872 and first resistance at 1.0906.
AUD USD
The AUD is trading at 0.9388 against the USD, at 9:40 GMT this morning, 0.66% higher from the New York close, as the Australian economy witnessed a higher-than-expected jobs boost in April and after the unemployment rate in the nation stood pat at 5.8%, defying analysts’ call for a rise. During the session, the pair traded at a high of 0.9396 and a low of 0.9325. AUD traded 0.06% lower against the USD in the New York session, and closed at 0.9326.
The pair is expected to find its first support at 0.9338 and first resistance at 0.9417.
Gold
At 9:40 GMT, Gold is trading at $1290.00 per ounce, a tad higher from the New York close. This morning, Gold traded at a high of $1292.60 and a low of $1287.40 per ounce. In the New York session yesterday, the yellow metal traded 1.07% lower, and closed at $1289.90, pressurized by a stronger US Dollar. The safe-haven appeal of the metal also came under pressure as the Fed Chief portrayed a bright picture of the US economy and after the Russian President agreed to resolve Ukraine crisis.
Gold has its first support at $1280.37 and first resistance at $1305.87.
Silver
Silver is trading at $19.23 per ounce, 0.57% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.36 and a low of $19.21. Silver traded 1.07% lower against the USD in the New York session, and closed at $19.34, taking cues from a decline in gold prices.
Silver has its first support at $19.05 and first resistance at $19.56.
Crude Oil
At 9:40 GMT, Oil is trading at $100.41 per barrel, 0.50% lower from the New York close. This morning, Oil traded at a high of $100.92 and a low of $100.33. Yesterday, Oil traded 0.67% higher in the New York session, and closed at $100.92, after the EIA reported an unexpected 1.8-million-barrels drop in the US crude stockpiles last week. Meanwhile, reluctance on the part of Libyan rebels to surrender two oil ports to new Prime Minister, Ahmed Maiteeq, further supported the momentum in oil prices.
It has its first support at $99.80 and first resistance at $101.00.
Economic Snapshot
UK Halifax house prices declined unexpectedly in April
On a monthly basis, Halifax house prices in UK fell 0.2% in April, following a revised decrease of 1.2% recorded in the preceding month. Markets were expecting Halifax house prices to rise 0.9% in April.
German industrial production declined unexpectedly in March
On a monthly and seasonally adjusted basis, German industrial output dropped 0.5% in March, compared to a revised 0.6% rise recorded in the previous month. Market had expected industrial production to rise 0.2% in March.
Spain industrial output rose in March
On an annual basis, calendar adjusted industrial output in Spain rose 0.6% in March, compared to a revised 2.5% increase recorded in the previous month.
Switzerland SECO consumer climate declined unexpectedly in Q1 2014
The SECO consumer climate indicator in Switzerland fell unexpectedly to a level of 1.0 between January and April 2014, compared to a reading of 2.0 reported in the previous three months.
Swiss consumer price index rose in line with market estimate in April
On a monthly basis, the consumer price index in Switzerland rose 0.1% in April, in line with market estimates and compared to 0.4% rise reported in the previous month. Meanwhile, on a monthly basis, Switzerland’s EU harmonized consumer price index rose 0.1% in April, compared to a 0.6% rise recorded in the previous month.
Australia’s unemployment rate remained unexpectedly steady in April
On a seasonally adjusted basis, unemployment rate in Australia remained unchanged at 5.8% in April, compared to the previous month. Market had expected Australia’s unemployment rate to rise to 5.9% in April. Meanwhile, the seasonally adjusted number of people employed in Australia rose by 14.2K in April, compared to an upwardly revised rise of 21.9K in the previous month.
China’s trade surplus widened in April
Trade surplus of China rose to $18.46 billion in April, from a revised surplus of $7.70 billion recorded in the previous month.
Good trades.
Forex Market Update 09Mai14
This morning, the greenback is trading mostly higher against most of the major currencies.
The GBP is trading lower even after data showed that UK’s trade deficit narrowed the most since December 2013 in March as manufacturing production in the nation accelerated at the fastest quarterly pace in almost 15 years.
The AUD lost ground against the USD as inflation data from China disappointed market sentiment and after the RBA, in its quarterly policy statement, slashed its growth and inflation forecast on the Australian economy for the June quarter of 2014 and projected interest rates to remain low for some more time amid uncertainty over the nation’s growth-outlook.
In a noteworthy development, S&P Ratings Services upgraded its outlook on Portugal’s “BB” sovereign rating to “Stable” from “Negative”, citing the nation’s strong economic and budgetary performance.
Yesterday, in the New York session, the USD traded mostly higher against the key currencies. Philadelphia Fed Chief, Charles Plosser projected a 3.0% growth in the US GDP for 2014, despite the recent winter slowdown.
The EUR came under pressure yesterday after the ECB President, Mario Draghi, following the central bank’s decision to hold its interest rate at 0.25%, stated that policymakers were ready to inject fresh stimulus measures in the economy as early at its next policy meeting in June if the conditions warranted it.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3811 against the USD, 0.22% lower from the New York close. In economic news, Germany’s trade surplus unexpectedly narrowed as exports slipped for the second consecutive month in March to post its biggest monthly fall in nearly 10 months. During the session, the pair traded at a high of 1.3845 and a low of 1.3811. Yesterday, the EUR traded 0.48% lower against the USD in the New York session, and closed at 1.3842, after the ECB President, Mario Draghi, hinted that policymakers were willing to add fresh stimulus measures as early in June if needed.
The pair is expected to find its first support at 1.3745 and first resistance at 1.3936.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6902 against the USD, 0.18% lower from the New York close. Data showed, manufacturing production in the UK rose at the fastest quarterly pace since 1999 while total trade deficit narrowed to £1.284 billion in March. During the session, the pair traded at a high of 1.6938 and a low of 1.6905. Yesterday, the British Pound traded 0.08% lower versus the Dollar in the New York session, and closed at 1.6933. The BoE, at its May policy meeting, kept its interest rate unchanged at 0.5% and maintained the size of its asset purchase facility at £375.0 billion.
The pair is expected to find its first support at 1.6875 and first resistance at 1.6952.
USD JPY
The USD is trading at 101.73 against the JPY at 9:40 GMT this morning, 0.11% higher from the New York close. Data released overnight showed that, Japan’s leading economic index fell more-than-expected to reach a 12-month low reading while its coincident index improved to a score of 114.0 in March. During the session, the pair traded at a high of 101.79 and a low of 101.59. In the New York session yesterday, the USD traded 0.14% lower against the JPY, and closed at 101.62.
The pair is expected to find its first support at 101.50 and first resistance at 101.92.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8826 against the Swiss Franc, 0.28% higher from the New York close. Early morning, the Fitch rating agency applauded the robust governance and track record of sound economic policy in the Swiss economy and affirmed its “AAA” sovereign rating on Switzerland, with a “Stable” outlook. During the session, the pair traded at a high of 0.8831 and a low of 0.8802. In the New York session yesterday, the USD traded 0.53% higher against the CHF, and closed at 0.8801.
The pair is expected to find its first support at 0.8742 and first resistance at 0.8870.
USD CAD
At 9:40 GMT, the USD is trading at 1.0823 against the CAD, 0.08% lower from the New York close, ahead of Canada’s employment data for April. During the session, the pair traded at a high of 1.0837 and a low of 1.0821. Yesterday, the USD traded 0.42% lower against the CAD in the New York session, and closed at 1.0832. In Canada, new housing price index rose 0.2% in March while annual housing starts surpassed analysts’ call and rose to a seasonally adjusted 194,809 units in April.
The pair is expected to find its first support at 1.0792 and first resistance at 1.0874.
AUD USD
The AUD is trading at 0.9366 against the USD, at 9:40 GMT this morning, marginally lower from the New York close, hurt by the latest batch of dismal economic releases from China and following the RBA’s decision to lower its growth forecast on the Australian economy for the June quarter of 2014. During the session, the pair traded at a high of 0.9376 and a low of 0.9356. AUD traded 0.16% lower against the USD in the New York session, and closed at 0.9370.
The pair is expected to find its first support at 0.9343 and first resistance at 0.9392.
Gold
At 9:40 GMT, Gold is trading at $1289.70 per ounce, slightly lower from the New York close. However, earlier gold prices advanced amid escalating tensions over Ukraine crisis. This morning, Gold traded at a high of $1292.90 and a low of $1287.70 per ounce. In the New York session yesterday, the yellow metal traded 0.08% higher, and closed at $1290.20, after Janet Yellen hinted that the US Fed was in no hurry to trim the size of its balance sheet and after pro-Moscow separatists ignored Russia’s decision to postpone a referendum on self-rule.
Gold has its first support at $1284.50 and first resistance at $1295.20.
Silver
Silver is trading at $19.19 per ounce, 0.08% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.24 and a low of $19.12. Silver traded marginally lower against the USD in the New York session, and closed at $19.21.
Silver has its first support at $19.08 and first resistance at $19.35.
Crude Oil
At 9:40 GMT, Oil is trading at $101.08 per barrel, 0.80% higher from the New York close, on renewed tensions over Ukraine and amid lingering concerns over Libya’s supply-outlook. This morning, Oil traded at a high of $101.18 and a low of $100.24. Yesterday, Oil traded 0.07% higher in the New York session, and closed at $100.28. An official data from China, the world’s second largest consumer of crude oil, showed that crude imports to the nation jumped by a record 22.0% in April.
It has its first support at $100.24 and first resistance at $101.55.
Economic Snapshot
UK industrial production rose in March
On an annual basis, industrial production in the UK rose 2.3% in March, compared to a revised 2.5% increase in the previous month. Meanwhile, on an annual basis, manufacturing production in the UK rose 3.3% in March, following a revised rise of 3.9% recorded in the preceding month.
UK construction output rose in March
On an annual basis, construction output in the UK rose 6.4% in March, following a revised rise of 3.9% recorded in the preceding month.
UK total trade deficit narrowed unexpectedly in March
UK’s total trade deficit surprisingly narrowed to £1.28 billion in March, from a revised deficit of £1.71 billion recorded in the previous month. Market had expected the UK’s total trade deficit to widen to £2.0 billion in March.
German trade balance narrowed in March
The seasonally adjusted trade surplus in Germany narrowed to €14.8 billion in March, compared to a revised surplus of €15.8 billion reported in the previous month.
Italian industrial production declined unexpectedly in March
On a seasonally adjusted monthly basis, industrial production in Italy dropped 0.5% in March, following a revised decline of 0.4% recorded in the preceding month. Markets were expecting industrial production to rise 0.3% in March.
Japan preliminary leading economic index declined in March
The preliminary leading economic index in Japan fell to a level of 106.5 in March, compared to a revised reading of 108.7 reported in the previous month. Meanwhile, Japan’s preliminary coincident index rose to a level of 114.0 in March, compared to a revised reading of 112.9 reported in the previous month.
Loose monetary policy to stay in the near future, indicated RBA quarterly policy statement
The Reserve Bank of Australia (RBA), in its quarterly monetary policy statement, raised its annual growth forecast to 3.0% by mid-2014, up from 2.75% estimated in February, while lowering its growth projections for 2015 by 0.25%. RBA also downgraded its inflation forecast in June to 3.0%, from 3.25% it projected in February.
China consumer price index rose at a slower pace in April
On an annual basis, China’s consumer price index (CPI) increased 1.8% in April, less than market expectations and compared to a 2.4% rise recorded in the previous month.
China producer prices declined in April
On an annual basis, China’s producer price index fell 2.0% in April, compared to a 2.3% fall recorded in the previous month.
Good weekend.
Weekly Market Update
During the past week, the greenback traded mostly higher against its key peers, as Fed Chief, Janet Yellen, predicted that the US economy would post strong growth figures in the current quarter despite her foreseeing continued low borrowing costs due to housing market risks and considerable slack in the labor market.
Separately, the Fed Board of Governor, Jeremy Stein, opined that the central bank was well placed to permanently exit its QE policy without creating significant volatility in the financial markets.
In economic news, the weekly initial jobless claims and the official services PMI in the US came in better-than-expected. Investors would now look forward to the release of the US retail sales and inflation data to assess the economic views of the central bank.
In a noteworthy development, the OECD reduced its growth outlook for the global economy for the current year, citing a slowdown in the developing economies. It further urged the developed nations to quicken their economic recovery to offset the sluggish growth in the emerging markets.
The EUR inched lower against the USD, as the ECB Chief, Mario Draghi, reiterated that a strong Euro remained the major reason behind the easing inflationary pressures in the Euro region, adding that early as the next month may witness some stimulus measures. Meanwhile, the European Commission trimmed its growth and inflation forecast for the next year.
A couple of higher revisions of the UK’s growth outlook from the OECD and NIESR failed to maintain the winning streak of the GBP against the USD. Separately, the Bank of England (BoE) voted to leave its policy tools on hold at its recently concluded meeting, as widely expected.
The Bank of Japan (BoJ), in the minutes of its latest policy meeting, reaffirmed that the nation’s economy was expected to recover at moderate pace and country’s spending pattern was successful in withstanding the recent sales tax hike introduced in April. Meanwhile, the OECD lowered its economic growth projection for Japan and urged a proper enactment of fiscal reforms.
The Loonie found support against the USD, amid optimism that the recent batch of positive macroeconomic data in Canada’s southern neighbor would result in robust trading activities between the two countries. However, a separate report revealed that employment fell in Canada during April.
The AUD found support, as robust Australian jobs and trade data of its major trading partner China, fuelled positive sentiments of the growth prospects of the island country. Meanwhile, the Reserve Bank of Australia (RBA) left its interest rates unchanged and indicated that a dovish monetary stance is an apt measure to foster economic activities in the nation.
EUR USD
Last week, the EUR traded 0.80% lower against the USD and closed at 1.3758, as the ECB President, Mario Draghi, cautioned about the strength of the Euro and added that the central bank was set to introduce additional easing measures when it meets next time in June. Even though the European Commission maintained its growth forecast for the Euro-zone’s economy for 2014, it lowered its growth outlook for the next year. Moreover, it also trimmed its inflation projections in the Euro-zone for the current and the next year. In a noteworthy development, S&P’s lifted its rating outlook for Portugal ‘Stable’ from ‘Negative’. Meanwhile, services activity in the euro bloc improved in line with its preliminary estimate in April, whereas, retail sales surprisingly advanced in March. Separately, factory orders and industrial production in Germany dropped unexpectedly in March. During the week, the pair traded at a high of 1.3994 and a low of 1.3745. The pair is expected to find its first support at 1.3671, with the next support expected at 1.3583. The first resistance is at 1.3920, and the next at 1.4081.
The Euro-zone’s consumer price inflation data would remain the key trigger during this week’s market action, followed by the central bank’s monthly report and the growth data of the common currency bloc. Meanwhile, investors would also keep a close eye on a spate of German macroeconomic data.
GBP USD
In the last week, GBP traded 0.11% lower against the USD and closed at 1.6851. During the week, the BoE left its interest rate at record-low levels at 0.5% and also kept the size of its bond purchases unaltered at £375 billion. Separately, the NIESR predicted that the UK’s economy grew at 1.0% during the three months ended in April. In a key development, the OECD lifted its growth forecast for the UK to 3.2% for 2014 from its previous estimate of 2.4% provided in last November. Other key data released during the week revealed that services PMI in the UK climbed higher than analysts’ expectations in April, whereas industrial production dropped in March. The pair traded at a high of 1.6998 and a low of 1.6832 in the previous week. GBPUSD is expected to find its first support at 1.6789, with the next at 1.6728. Resistance exists first at 1.6955, and then at 1.7060.
The release of the BoE’s quarterly inflation report is expected to remain on the radar of market participation, as it might help investors gauge the near-term growth prospects of the UK. Investors also expected to keep a close watch on the UK’s jobs data.
USD JPY
The USD traded 0.33% lower against the JPY over the past week, closing at 101.86. During the week, the BoJ released the minutes of the latest policy meeting held on April 7-8, which indicated that the nation would continue to improve at a moderate pace in the foreseeable future. It also stated that a hike in the sales tax introduced in the past month had no detrimental effect on spending pattern in the nation which remained healthy. Separately, the OECD slashed its growth forecast for Japan to 1.2% for 2014 and urged that the nation was in dire need to strictly adopt fiscal reforms with a view to avoid any hindrance to the economic growth. In economic news, Markit economics stated that services PMI in Japan contracted in April. Meanwhile, leading economic index in the nation dropped more than expectations in March. The pair traded at a high of 102.24 and a low of 101.43. The pair is expected to find its first support at 101.44, with the next support expected at 101.03. The first resistance is at 102.26, and the next at 102.66.
Investors in JPY are expected to track the release of the nation’s GDP data to determine the trend of the pair in this week. Moreover, speech of the BoJ’s Governor would also gather much of market attention.
USD CHF
USD traded 0.96% higher against the CHF and closed at 0.8864 in the last week, as encouraging US macroeconomic data and comments from the US Fed Chairwoman, Janet Yellen, that the nation’s economy was on its track to post a solid growth, supported the greenback. The State Secretariat for Economic Affairs reported that consumer climate indicator in Switzerland fell unexpectedly to a level of 1.0 between January and April 2014. Meanwhile, the annual consumer price inflation and jobless rate in Switzerland remained steady April. During the period, the pair traded at a high of 0.8874 and a low of 0.8703. The first support is at 0.8753, and the next at 0.8643. Resistance exists first at 0.8924, and then at 0.8985.
Apart from the global macroeconomic trends, Swiss Franc investors would rely on the release of the nation’s retail sales and ZEW survey data in placing their bets in the pair.
USD CAD
Last week, the USD traded 0.67% lower against the CAD and closed at 1.0898, as the US Fed Chief, Janet Yellen, reiterated that interest rates in the nation were expected to remain at current level for a prolonged period of time. The Loonie found support, amid optimism that recent economic developments in its major trading partner, US, would improve the trading prospects between the two nations. However, an unexpected drop in the Canadian employment data limited the gains in the Loonie. In economic news, housing starts in Canada rose more than market expectations, whereas, merchandise trade balance narrowed in March. Separately, manufacturing activity deteriorated in the past month. USDCAD traded at a high of 1.0991 and a low of 1.0812 in the previous week. The first support is at 1.0810, with the next at 1.0721. The first resistance is at 1.0989, while the next is at 1.1079.
The Loonie trades are expected to keep a close tab on the BoC’s review which might provide a gist of the recent happenings in the nation. Moreover, the Canadian housing data is expected to determine the near-term trend in the pair.
AUD USD
AUD traded 0.92% higher against the USD last week, and closed at 0.9362, after the RBA left its lending rates at current levels and as encouraging trade data of its prime trading partner, China, improved the trading relations between the two countries. Moreover, upbeat jobs data of the island nation also cemented the positive views of the central bank towards the nation’s labor market. Also, upward revision of the nation’s economic growth from the central bank for quarter ending June 2014 fuelled positive sentiment for the AUD. However, the central bank’s dovish stance on the future interest rates kept in check the gains in the Aussie. Moreover, the central bank added that inflation in the nation was expected to remain in the range of its target rate. During the week, the pair traded at a high of 0.9396 and a low of 0.9251. The first support is at 0.9277, and the next at 0.9191. The first resistance is at 0.9422, and the next at 0.9481.
Aussie traders would look forward to the nation’s budget release. Moreover, macroeconomic triggers in China would also act as a catalyst in determining the direction of the pair in this week.
Gold
In the prior week, Gold traded 0.83% lower against the USD and closed at USD1288.79, as the encouraging remarks regarding the US future economic prospects given by the US Fed Chair, boosted risk appetite among investors and thereby reduced demand for the yellow metal. Gold also lost its shine after the Russian President, Vladimir Putin, removed its troops from the Ukrainian border and sought an amiable way to settle the geopolitical tensions between the two nations. Moreover, encouraging US domestic data also dented demand for safe haven appeal. Furthermore, a report published by China Gold Association, revealed that the nation’s consumption of the yellow metal plunged more than 40% in the first quarter of 2014, signaling the diminishing demand for the safe haven asset. The yellow metal traded at a high of 1315.70 and a low of 1285.09 in the previous week. Gold is expected to find support at 1277.35 and the next at 1265.92. The first resistance is at 1307.96, while the next is at 1327.14.
Investors in the yellow metal are expected to keep a close watch on the US consumer price inflation and retail sales data, as a positive reading would confirm the views of the central bank that the US economy recovery was gathering steam. Moreover, developments in Ukraine would also actively drive the prices of the safe haven asset.
Crude Oil
After swinging between gains and losses, crude oil finally settled 0.23% higher against the USD in the past week at USD99.99, after two of the leading energy watchdogs in the US reported an unexpected drop in the nation’s crude oil inventories. The American Petroleum Institute reported an unexpected 1.8 million drop in the US crude oil inventories, whereas, the Energy Information Administration reported a similar decline in the crude oil stockpiles during the week ended May 2. Crude oil also found support, on reports that unrest in oil rich African nation, Libya, was renewed after rebels showed their reluctance to deal with the nation’s new Prime Minister, leaving two ports shut. Moreover, encouraging Chinese trade data lifted demand for the commodity. Oil traded at a high of 101.18 and a low of 98.91 in the previous week. Oil has its first major support at 98.87, while the next support exists at 97.76. The first resistance is at 101.14, and the next at 102.30.
Crude oil traders would take hints from the release of a barrage of macroeconomic data from the US while placing their trades in the commodity. Also, they would keep a close eye on the developments between Ukraine and Russia.
Good trades.
Forex Market Update 13Mai14
This morning, the greenback is trading mostly higher against most of the major currencies. Earlier today, the Atlanta Fed President, Dennis Lockhart, affirmed that only a harsh change in the US economic condition can compel the Fed to alter the tapering pace of its stimulus measure.
The EUR lost ground following the recent batch of lackluster ZEW economic data from the Euro-zone and German economy. Yesterday, the IMF Chief, Christine Lagarde, expressed concerns on the growth prospects of the Euro-zone economy and reiterated the need for loose monetary policy in the region.
Demand for the AUD came under pressure following soft housing data from the Australian economy and after Australia’s largest trading partner, China, reported an unexpected slowdown in its industrial production, retail sales and investment growth data for April.
Yesterday, in the New York session, the greenback traded higher against the key currencies. During his speech, the Philadelphia Fed President, Charles Plosser opined that a decline in the US labor force participation over the past seven years was mainly due increased retirement or movements into disability.
In a noteworthy event, the CBI upgraded its 2014 and 2015 growth forecast on the UK economy and projected interest rate in the nation to rise in the first quarter of 2015 rather than in the second quarter.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3749 against the USD, 0.08% lower from the New York close, after the ZEW survey showed that its index, measuring the economic sentiment in Euro-zone, unexpectedly fell in May while that of Germany dropped for the fifth straight month. However, the ZEW’s survey on the current situation of Germany surpassed market estimates for this month. During the session, the pair traded at a high of 1.3772 and a low of 1.3748. Yesterday, the EUR traded 0.07% lower against the USD in the New York session, and closed at 1.3760.
The pair is expected to find its first support at 1.3735 and first resistance at 1.3768.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6854 against the USD, 0.09% lower from the New York close. Data released overnight showed that the BRC retail sales monitor in the UK rose more-than-expected 4.2% (YoY) in April. During the session, the pair traded at a high of 1.6885 and a low of 1.6847. Yesterday, the British Pound traded 0.13% lower versus the Dollar in the New York session, and closed at 1.6869. Late Monday, the CBI expressed an upbeat view on the growth of the UK economy and projected interest rate in the economy to rise faster than previously estimated.
The pair is expected to find its first support at 1.6829 and first resistance at 1.6892.
USD JPY
The USD is trading at 102.28 against the JPY at 9:40 GMT this morning, 0.13% higher from the New York close, as a rally in Asian and European stock markets weighed on the safe-haven appeal of the Japanese Yen. In economic news, the BoJ reported that money supply (M2 + CD) in the nation registered a 3.4% year-on-year rise in April, following a 3.6% increase in the previous month. During the session, the pair traded at a high of 102.38 and a low of 102.17. In the New York session yesterday, the USD traded 0.19% higher against the JPY, and closed at 102.15.
The pair is expected to find its first support at 101.98 and first resistance at 102.48.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8875 against the Swiss Franc, a tad lower from the New York close. Amid lack of major economic release from the Swiss economy, traders are expected to eye global economic news for further cues in the currency pair. During the session, the pair traded at a high of 0.8884 and a low of 0.8869. In the New York session yesterday, the USD traded 0.09% higher against the CHF, and closed at 0.8878.
The pair is expected to find its first support at 0.8863 and first resistance at 0.8886.
USD CAD
At 9:40 GMT, the USD is trading at 1.0916 against the CAD, 0.18% higher from the New York close, ahead of the BoC’s quarterly review report on the Canadian economy. During the session, the pair traded at a high of 1.0928 and a low of 1.0897. Yesterday, the USD traded 0.11% higher against the CAD in the New York session, and closed at 1.0896.
The pair is expected to find its first support at 1.0883 and first resistance at 1.0939.
AUD USD
The AUD is trading at 0.9342 against the USD, at 9:40 GMT this morning, 0.19% lower from the New York close, following the latest batch of soft housing data from the Australian economy. Negative sentiment was also fuelled after China reported unexpected decelerations in its industrial production and retail sales for April. During the session, the pair traded at a high of 0.9365 and a low of 0.9337. AUD traded 0.22% lower against the USD in the New York session, and closed at 0.9360.
The pair is expected to find its first support at 0.9320 and first resistance at 0.9376.
Gold
At 9:40 GMT, Gold is trading at $1293.60 per ounce, 0.17% lower from the New York close, as a rally in equity markets bolstered traders’ risk appetite. Negative sentiment was also fuelled after the SPDR Gold Trust suffered 2.39 tons of outflow on Monday - the first outflow since May 2. This morning, Gold traded at a high of $1298.80 and a low of $1290.20 per ounce. In the New York session yesterday, the yellow metal traded 0.38% lower, and closed at $1295.80. However, escalating tensions in Ukraine kept the metal’s losses in check.
Gold has its first support at $1287.70 and first resistance at $1302.00.
Silver
Silver is trading at $19.55 per ounce, 0.05% higher from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.61 and a low of $19.37. Silver traded 0.15% lower against the USD in the New York session, and closed at $19.54, amid broad gains in the US Dollar. However, ongoing geo-political turmoil in Ukraine limited losses in silver prices.
Silver has its first support at $19.39 and first resistance at $19.69.
Crude Oil
At 9:40 GMT, Oil is trading at $100.84 per barrel, 0.30% higher from the New York close. However, oil prices initially came under pressure after China reported a slowdown in industrial production growth. This morning, Oil traded at a high of $100.87 and a low of $100.36. Yesterday, Oil traded 0.12% higher in the New York session, and closed at $100.56, as escalating tensions in Ukraine renewed concerns on the supply-outlook of the commodity from the region. However, Libya’s decision to resume operations at its eastern oilfields and pipelines eased some concerns on the supply prospects of oil.
It has its first support at $100.36 and first resistance at $101.13.
Economic Snapshot
Euro-zone ZEW economic sentiment indicator dropped unexpectedly in May
The ZEW economic sentiment indicator in the Euro-zone surprisingly slumped to a level of 55.2 in May from a reading of 61.2 in April. Markets were expecting the ZEW economic sentiment indicator to rise to a level of 63.5 in May.
German ZEW economic sentiment indicator fell more than expectations in May
The ZEW economic sentiment indicator in Germany dropped to a level of 33.1 in May, compared to a reading of 43.2 reported in the previous month. Markets were expecting the ZEW economic sentiment indicator to fall to a level of 41.0 in May. Meanwhile, the ZEW current situation indicator in Germany rose to a level of 62.1 in May, compared to a reading of 59.5 reported in the previous month.
German wholesale price index increased in April
On a monthly basis, the wholesale price index in Germany increased 0.2% in April, compared to a flat change reported in the previous month.
French current account deficit widened in March
France posted a current account deficit of €1.5 billion in March, compared to a deficit of €1.4 billion recorded in the previous month.
Italy’s CPI rose in line with the preliminary estimate in April
On an annual basis, Italy’s final consumer price index (CPI) rose 0.6% in April, in line with the preliminary estimate and compared to a 0.4% increase recorded in the previous month.
Australia’s house prices rose at a slower pace in Q12014
On a quarterly basis, the house price index (HPI) in Australia rose 1.7% in Q12014, compared to a revised rise of 3.8% recorded in the previous quarter. Markets had expected the house price index to rise 3.0% in Q12014.
Home loan approvals in Australia declined in March
On a seasonally adjusted monthly basis, home loan approvals in Australia dropped 0.9% in March, following a 2.3% increase recorded in the preceding month.
China industrial production rose less than anticipated in April
On an annual basis, industrial production in China rose less-than-expected 8.7% in April, compared to an 8.8% rise recorded in the previous month.
China retail sales rose less than market expectations in April
On an annual basis, retail sales in China rose 11.9% in April, compared to a 12.2% increase recorded in the previous month. Markets were expecting retail sales to rise 12.2% in April.
China urban fixed-asset investment rose less than expected in April
On a year-to-date basis, fixed assets investments excluding rural household in China rose 17.3% for the period of January to April 2014, less than economists’ expectations and compared to a 17.6% rise recorded for the period of January to March 2014.
Good trades.
Forex Market Update 14Mai14
This morning, the greenback is trading mostly lower against most of the major currencies.
The EUR is trading higher against the USD, reversing its previous session losses on the back of lackluster ZEW economic data. However, initially during the day, the EUR came under pressure after the ECB Board member, Peter Praet stated that the central bank is looking at various options of stimulus programme. Separately, an ECB policymaker, Yves Mersch hinted that the ECB may purchase sovereign bonds in the secondary market.
The GBP lost ground after UK’s claimant count data failed to meet market expectations for April. Negative sentiment was also fuelled after the BoE, in its quarterly inflation report casted doubts on the sustainability of the recent UK economic recovery and lowered its forecast on the nation’s unemployment rate. Separately, the BoE Chief, Mark Carney indicated that the bank was in no hurry to raise its interest rate. He further highlighted that there was "considerable uncertainty" around the estimate of the amount of slack in the economy and it has to be reduced first before borrowing costs are raised.
Earlier during the day, the NZD came under pressure after the RBNZ Governor, Graeme Wheeler cautioned the central bank would monitor the NZD exchange rate before tightening policy.
Yesterday, the greenback traded higher against the key currencies in the New York session despite a decline in the US April retail sales.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3714 against the USD, 0.08% higher from the New York close. On the economic front, Euro-zone’s industrial production unexpectedly fell in March while consumer inflation rate in Germany and Spain matched analysts’ expectations for April. However, France’s EU normalized consumer inflation rate registered a month-on-month fall in April. During the session, the pair traded at a high of 1.3732 and a low of 1.3702. Yesterday, the EUR traded 0.15% lower against the USD in the New York session, and closed at 1.3703.
The pair is expected to find its first support at 1.3683 and first resistance at 1.3750.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6798 against the USD, 0.17% lower from the New York close, after the BoE’s quarterly inflation report revealed that interest rate might continue to remain at low levels for some time and after data showed that jobless claims in the nation fell less than market expectations for April, even as unemployment rate fell to a to a five-year low of 6.8% in the three months to March. During the session, the pair traded at a high of 1.6876 and a low of 1.6788. Yesterday, the British Pound traded 0.14% lower versus the Dollar in the New York session, and closed at 1.6826.
The pair is expected to find its first support at 1.6745 and first resistance at 1.6863.
USD JPY
The USD is trading at 101.78 against the JPY at 9:40 GMT this morning, 0.49% lower from the New York close, ahead of Japan’s first quarter GDP data. Data released overnight showed that, on a year-on-year basis, Japan’s domestic corporate goods prices rose 4.1% in April while machine tool orders surged 48.8% in Japan last month. During the session, the pair traded at a high of 102.29 and a low of 101.79. In the New York session yesterday, the USD traded 0.14% higher against the JPY, and closed at 102.27.
The pair is expected to find its first support at 101.54 and first resistance at 102.19.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8896 against the Swiss Franc, 0.06% lower from the New York close. However, earlier, the CHF came under pressure after the ZEW survey on the economic expectations from the Swiss economy rose to a reading of 7.4 in May, no where comparable to market expectations for the index to rise to a score of 10.0. During the session, the pair traded at a high of 0.8906 and a low of 0.8889. In the New York session yesterday, the USD traded 0.16% higher against the CHF, and closed at 0.8901.
The pair is expected to find its first support at 0.8874 and first resistance at 0.8914.
USD CAD
At 9:40 GMT, the USD is trading at 1.0898 against the CAD, 0.09% lower from the New York close. During the session, the pair traded at a high of 1.0923 and a low of 1.0899. Yesterday, the USD traded 0.11% higher against the CAD in the New York session, and closed at 1.0908. The BoC, in its semi-annual review report, opined that official jobless rate in Canada was overstated as compared to the actual figures.
The pair is expected to find its first support at 1.0880 and first resistance at 1.0920.
AUD USD
The AUD is trading at 0.9399 against the USD, at 9:40 GMT this morning, 0.45% higher from the New York close. During the session, the pair traded at a high of 0.9411 and a low of 0.9360. AUD traded 0.26% lower against the USD in the New York session, and closed at 0.9357, hurt by the recent batch of soft economic releases from Australia and its largest trading partner, China.
The pair is expected to find its first support at 0.9354 and first resistance at 0.9428.
Gold
At 9:40 GMT, Gold is trading at $1300.80 per ounce, 0.51% higher from the New York close, on escalating tensions over Ukraine crisis. This morning, Gold traded at a high of $1302.50 and a low of $1291.60 per ounce. In the New York session yesterday, the yellow metal traded 0.22% lower, and closed at $1294.20, as a rally in global equity markets and a stronger US Dollar lured investors away from the safe-haven metal. Separately, a leading broker slashes it 3 month and 6 month price estimate on gold to $1,250.00 and $1,300.00 per ounce, respectively.
Gold has its first support at $1292.43 and first resistance at $1305.83.
Silver
Silver is trading at $19.76 per ounce, 1.07% higher from the New York close, at 9:40 GMT this morning, tracking gains in gold prices. This morning, Silver traded at a high of $19.85 and a low of $19.51. Silver traded marginally higher against the USD in the New York session, and closed at $19.55, amid ongoing geo-political tensions in Ukraine. However, a stronger US Dollar and soft demand for industrial metals capped the commodity’s gains.
Silver has its first support at $19.49 and first resistance at $19.94.
Crude Oil
At 9:40 GMT, Oil is trading at $101.94 per barrel, 0.10% higher from the New York close, ahead of the EIA’s weekly report on the US crude inventories. This morning, Oil traded at a high of $102.18 and a low of $101.84. Yesterday, Oil traded 0.48% higher in the New York session, and closed at $101.86, as lingering concerns on supply-outlook from Libya and the Russia- Ukraine region overshadowed a gain in the API’s US crude supplies data. Additionally, the OPEC raised its forecast on total global oil demand for 2014.
It has its first support at $101.13 and first resistance at $102.47.
Economic Snapshot
UK ILO unemployment rate fell in line with market estimates in March
The ILO unemployment rate in the UK fell to 6.8% for January to March 2014, in line with market expectations and compared to a level of 6.9% recorded for December 2013 to February 2014.
UK average earnings rose less than expected in March
On an annual basis, average earnings excluding bonus in the UK rose 1.3% % for January to March 2014, less than market expectations for a rise of 1.5% and compared to a 1.4% increase recorded for December 2013 to February 2014.
Employment in the UK advanced more than expected in March
The number of people employed in the UK rose 283.0K for January to March 2014, more than market estimates of a rise of 248.0K and compared to a rise of 239.0K recorded for December 2013 to February 2014. Meanwhile, the number of people claiming unemployment benefits in the UK declined 25.1K in April, compared to a revised fall of 30.6K recorded in the previous month.
BoE maintained its growth and inflation outlook
The Bank of England (BoE) in its quarterly inflation report stated that it expects the UK economy to expand in 2014, the same forecast it made in February, and that annual inflation would be close to its 2% target over the next two to three years if interest rates in the UK rise in line with expectations in financial markets. However, it lowered its expectations for unemployment.
BoE’s Carney played down earlier than anticipated hike in interest rates
The Bank of England (BoE) Governor, Mark Carney, dispelled expectations of an earlier than anticipated rise in interest rates, despite signs of a pickup in the nation’s economic recovery.
Euro-zone industrial production fell in line with the market estimates in March
On a seasonally adjusted monthly basis, industrial production in the Euro-zone fell 0.3% in March, in line with the market expectations and compared to a 0.2% increase recorded in the previous month.
German final CPI rose in line with the preliminary estimate in April
On an annual basis, the final consumer price index (CPI) in Germany rose 1.3% in April, in line with the preliminary estimate and compared to a 1.0% rise in the previous month.
French CPI rose less than market estimates in April
On an annual basis, the EU normalised consumer price index (CPI) in France rose 0.8% in April, compared to a 0.7% rise reported in the previous month. Markets were expecting the EU normalised CPI to rise 0.9% in April.
Spain’s final CPI rose in line with the preliminary estimate in April
On an annual basis, the final consumer price index (CPI) in Spain rose 0.4% in April, in line with the flash estimate and compared to a fall of 0.1% in the previous month.
Switzerland ZEW economic expectations index rose less than market estimates in May
The Centre for European Economic Research reported that the ZEW economic expectations index in Switzerland rose to a level of 7.4 in May, lower than market expectations of a level of 10.0 and compared to a reading of 7.0 reported in the previous month.
Good trades.
Market Update 15Mai14
This morning, the greenback is trading mostly higher against most of the major currencies, ahead of the US consumer inflation data and a planned speech from the Fed Chief, Janet Yellen.
The EUR lost ground after Euro-zone’s Q1 GDP growth disappointed while consumer prices in the nation managed to come in-line with market estimates for April. Adding to the negative sentiment were comments from ECB’s Vitor Constancio who hinted that the ECB would act swiftly if inflation outlook deteriorates. However, German Finance Minister, Wolfgang Schaeuble dismissed concerns by stating that he did not see deflation in the region currently.
In a noteworthy event, the IMF’s Olivier Blanchard revealed that the fund sees 25% probability for the Euro-zone economy to slip in deflation by the end of 2015.
In Japan, the BoJ Governor, Haruhiko Kuroda highlighted his confidence in the nation achieving its 2.0% inflation target in fiscal 2015, after reports showed that economic growth in Japan rose at the fastest pace in more than 2 years in Q1 2013. However, Fitch Ratings kept its “Negative” outlook on Japan even as it affirmed its “A+” rating on the nation.
Yesterday, in the New York session, the greenback traded mixed against the key currencies. In economic releases, US producer prices registered its biggest rise since September 2012 in April.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3662 against the USD, 0.39% lower from the New York close, after Euro-zone’s GDP data came in below forecast for the first quarter and after consumer prices in the region fell on a monthly basis in April. However, economic growth in Germany surpassed analysts’ estimates while economic growth in France and Italy contracted in the Q1. During the session, the pair traded at a high of 1.3724 and a low of 1.3668. Yesterday, the EUR traded a tad higher against the USD in the New York session, and closed at 1.3715.
The pair is expected to find its first support at 1.3639 and first resistance at 1.3706.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6758 against the USD, marginally lower from the New York close. Earlier today, BoE’s Ben Broadbent hinted that interest rates in the UK economy would not rise until the economy is ready to withstand the effects of policy tightening. Separately, the UK CB leading economic indicator rose at a slower pace in March. During the session, the pair traded at a high of 1.6779 and a low of 1.6744. Yesterday, the British Pound traded marginally lower versus the Dollar in the New York session, and closed at 1.6766, hurt by the BoE Governor, Mark Carney’s dovish comments.
The pair is expected to find its first support at 1.6722 and first resistance at 1.6804.
USD JPY
The USD is trading at 101.90 against the JPY at 9:40 GMT this morning, 0.05% higher from the New York close. However, initially the JPY received support after data showed that the Japanese economy expanded at the fastest rate in nearly three years in the first quarter even as the nation’s tertiary industry index and consumer confidence index fell short of analysts’ estimates. During the session, the pair traded at a high of 102.13 and a low of 101.76. In the New York session yesterday, the USD traded a tad lower against the JPY, and closed at 101.85.
The pair is expected to find its first support at 101.66 and first resistance at 102.13.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8946 against the Swiss Franc, 0.53% higher from the New York close, as the latter came under pressure after Swiss producer and import prices defied market expectations and fell 0.3% month-on-month in April. During the session, the pair traded at a high of 0.8949 and a low of 0.8894. In the New York session yesterday, the USD traded slightly higher against the CHF, and closed at 0.8899.
The pair is expected to find its first support at 0.8906 and first resistance at 0.8968.
USD CAD
At 9:40 GMT, the USD is trading at 1.0869 against the CAD, 0.18% lower from the New York close. Traders await Canada’s manufacturing shipments data for further cues in the Loonie. During the session, the pair traded at a high of 1.0892 and a low of 1.0862. Yesterday, the USD traded 0.20% lower against the CAD in the New York session, and closed at 1.0889.
The pair is expected to find its first support at 1.0842 and first resistance at 1.0904.
AUD USD
The AUD is trading at 0.9376 against the USD, at 9:40 GMT this morning, a tad lower from the New York close. In economic news, Moody’s rating agency expressed an optimistic view on the Australia’s mining sector and affirmed its “AAA” credit rating on the nation. In data, RBA foreign exchange transaction totaled A$325.0 million in April, nearly half of A$736 million worth of transactions in the previous month. During the session, the pair traded at a high of 0.9395 and a low of 0.9365. AUD traded 0.22% lower against the USD in the New York session, and closed at 0.9378.
The pair is expected to find its first support at 0.9352 and first resistance at 0.9404.
Gold
At 9:40 GMT, Gold is trading at $1303.60 per ounce, 0.13% lower from the New York close. This morning, Gold traded at a high of $1307.30 and a low of $1301.40 per ounce. In the New York session yesterday, the yellow metal traded 0.18% lower, and closed at $1305.30, but held ground above the key
$1,300-an-ounce level, supported by lingering tensions over in Ukraine crisis.
Gold has its first support at $1299.53 and first resistance at $1308.43.
Silver
Silver is trading at $19.71 per ounce, 0.33% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.84 and a low of $19.61. Silver traded 0.70% lower against the USD in the New York session, and closed at $19.78. However, losses in the white metal were limited after a report showed that demand for physical silver climbed 13.0% to reach a to a record high of 1,081.1 million ounces in 2013.
Silver has its first support at $19.55 and first resistance at $19.94.
Crude Oil
At 9:40 GMT, Oil is trading at $101.96 per barrel, marginally higher from the New York close. This morning, Oil traded at a high of $102.13 and a low of $101.74. Yesterday, Oil traded 0.16% lower in the New York session, and closed at $101.93, as concerns on supply-outlook of the commodity eased after the EIA reported a 900,000 barrels rise in the US crude supplies last week. Oil prices also came under pressure after Libya reported that operation at its El Feel oilfield resumed yesterday.
It has its first support at $101.58 and first resistance at $102.49.
Economic Snapshot
UK CB leading economic index rose at a slower pace in March
The CB leading economic index in the UK rose 0.3% in March, following an increase of 0.4% recorded in the preceding month.
Euro-zone GDP rose less than market estimates in Q1 2014
On a seasonally adjusted quarterly basis, the preliminary GDP in the Euro-zone rose 0.2% in Q1 2014, less than market expectations of a rise of 0.4% and compared to rise of 0.2% in the previous quarter.
Euro-zone final consumer price index rose in line with the preliminary estimate in April
On an annual basis, the Euro-zone’s final consumer price index increased 0.7% in April, in line with preliminary estimate and compared to a rise of 0.5% recorded in the previous month.
ECB to maintain a high degree of monetary accommodation if needed, indicated ECB’s monthly report
The European Central Bank (ECB) in its monthly report for May 2014, indicated that the Euro-zone economy is recovering as expected and the central bank’s inflation expectations for the Euro area over the medium to long term continue to be firmly anchored below, but close to 2.0%.
German economy expanded more than market expectations in the first quarter of 2014
On a seasonally adjusted quarterly basis, Germany’s GDP increased 0.8% in the Q1 2014, more than market estimates of 0.7% rise and compared to a 0.4% rise reported in the preceding quarter.
France GDP remained flat in Q1 2014
On a quarterly basis, French GDP remained flat in the first quarter of 2014, compared to a revised rise of 0.2% reported in the previous quarter.
Italy’s economy contracts unexpectedly in the Q1 2014
On a seasonally and calendar adjusted quarterly basis, the GDP in Italy fell 0.1% in the first quarter of 2014, compared to a 0.1% rise reported in the previous quarter. Markets had expected the GDP to rise 0.2% in the Q1 2014.
Swiss producer and import prices dropped in April
On a monthly basis, the producer and import price index in Switzerland fell 0.3% in April, compared to a flat change recorded in the previous month.
Japan consumer confidence index declined in April
The consumer confidence index in Japan fell unexpectedly to a level of 37.0 in April, compared to reading of 37.5 reported in the previous month.
Australian RBA foreign exchange transaction declined in April
The RBA foreign exchange transaction in Australia declined to A$ 325.0 million in April from A$ 736.0 million in the previous month.
Good trades.
Forex Market Update 16Mai14
This morning, the greenback is trading mostly lower against most of the major currencies. Earlier, the Fed Chief, Janet Yellen opined that, despite the recent progress, the US economy still has a long way to reach a healthy level.
The EUR is trading higher against the USD, benefited from a strong trade balance data from the Euro-zone for March. Late Thursday, ECB’s Yves Mersch revealed that the central bank is looking at possibly more policy tools to act swiftly in case of emergency.
In a noteworthy event, the IMF indicated that the French economy would have to grow at the pace of 0.5% each quarter to achieve its 1.0% growth target in 2014.
Yesterday, in the New York session, the greenback traded lower against the key currencies, even as US weekly jobless claims hit seven year low last week and consumer prices rose at the fastest pace in 10 months in April.
In Canada, manufacturing shipments rose for the sixth time in seven months in March while the BoC’s Lawrence Schembri highlighted the need for relatively low interest rates in the economy for some more time to achieve 2.0% inflation target.
Late Yesterday, New Zealand’s Finance Minister, Bill English opined that the NZD still remains high at current levels and that it is causing problems in rebalancing the economy.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3717 against the USD, a tad higher from the New York close. In economic data, the Euro-zone trade surplus widened more-than-expected to a non-seasonally adjusted €17.1 billion in March while French non-farm payrolls declined 0.1% in Q1. During the session, the pair traded at a high of 1.3727 and a low of 1.3711. Yesterday, the EUR traded 0.39% higher against the USD in the New York session, and closed at 1.3711. An ECB policymaker, Yves Mersch hinted that the central bank is working on different policy tools and is ready to act swiftly if required.
The pair is expected to find its first support at 1.3666 and first resistance at 1.3751.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6806 against the USD, 0.09% higher from the New York close, amid lack of economic releases from the UK economy. During the session, the pair traded at a high of 1.6815 and a low of 1.6787. Yesterday, the British Pound traded 0.14% higher versus the Dollar in the New York session, and closed at 1.6791.
The pair is expected to find its first support at 1.6760 and first resistance at 1.6833.
USD JPY
The USD is trading at 101.53 against the JPY at 9:40 GMT this morning, marginally lower from the New York close. Data released overnight showed that industrial production in Japan rose more than market expectations and capacity utilization rose at a faster pace in March. During the session, the pair traded at a high of 101.66 and a low of 101.46. In the New York session yesterday, the USD traded 0.36% lower against the JPY, and closed at 101.57, as the latter advanced amid strong demand for safe-haven assets following soft economic releases from the Euro-zone.
The pair is expected to find its first support at 101.19 and first resistance at 101.98.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8904 against the Swiss Franc, slightly lower from the New York close. During the session, the pair traded at a high of 0.8912 and a low of 0.8902. In the New York session yesterday, the USD traded 0.49% lower against the CHF, and closed at 0.8908.
The pair is expected to find its first support at 0.8871 and first resistance at 0.8949.
USD CAD
At 9:40 GMT, the USD is trading at 1.0872 against the CAD, marginally lower from the New York close. During the session, the pair traded at a high of 1.0888 and a low of 1.0873. Yesterday, the USD ended flat against the CAD in the New York session, and closed at 1.0875. The BoC Deputy Governor, Lawrence Schembri hinted that interest rates in Canada would remain relatively low for a longer time to push inflation to its 2.0% target. Separately, data showed that manufacturing shipments in Canada rose for the sixth time in seven months in March
The pair is expected to find its first support at 1.0858 and first resistance at 1.0890.
AUD USD
The AUD is trading at 0.9361 against the USD, at 9:40 GMT this morning, 0.05% higher from the New York close. Early morning, China, Australia’s largest trading parent reported that it witnessed a slowdown in foreign direct investment during April. During the session, the pair traded at a high of 0.9367 and a low of 0.9342. AUD traded 0.15% higher against the USD in the New York session, and closed at 0.9356.
The pair is expected to find its first support at 0.9331 and first resistance at 0.9385.
Gold
At 9:40 GMT, Gold is trading at $1294.20 per ounce, 0.15% lower from the New York close. This morning, Gold traded at a high of $1298.30 and a low of $1291.80 per ounce. In the New York session yesterday, the yellow metal traded 0.08% higher, and closed at $1296.10, as a broad decline in the US equity markets lured investors to the metal for alternate investment. However, the recent batch of strong economic releases from the US economy capped the gains in the commodity.
Gold has its first support at $1287.73 and first resistance at $1303.83.
Silver
Silver is trading at $19.40 per ounce, 0.61% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.53 and a low of $19.33. Silver traded 0.15% lower against the USD in the New York session, and closed at $19.52.
Silver has its first support at $19.24 and first resistance at $19.66.
Crude Oil
At 9:40 GMT, Oil is trading at $101.57 per barrel, marginally lower from the New York close. This morning, Oil traded at a high of $102.04 and a low of $101.39. Yesterday, Oil traded 0.50% lower in the New York session, and closed at $101.60, amid easing supply concerns as Libya produced 300,000 barrels of oil after its El Feel and Wafa oil fields resumed operations. However, the IEA raised its forecast on global oil demand and projected the need for the OPEC to pump 800,000 barrels more crude oil per day in second half of 2014.
It has its first support at $101.14 and first resistance at $102.13.
Economic Snapshot
Euro-zone trade surplus widened more than expected in March
The Eurostat reported that the Euro-zone posted a non-seasonally adjusted trade surplus of €17.1 billion in March, compared to a revised surplus of €14.2 billion recorded in the previous month. Markets were expecting the non-seasonally adjusted trade surplus in the Euro-zone to widen to €16.0 billion in March.
Euro-zone EU 27 new car registrations rose at a slower pace in April
The European Automobile Manufacturers' Association (ACEA) reported that on an annual basis, EU 27 new car registrations in the Euro-zone rose 4.6% in April, compared to a 10.6% rise in the previous month.
France’s non-farm payrolls declined in line with the market estimates in Q1 2014
The National Institute of Statistics and Economic Studies (INSEE) reported that on a quarterly basis, the preliminary non-farm payrolls in France dropped 0.1% in Q1 2014, in line with market expectations and compared to a 0.1% increase recorded in the previous quarter.
Italy’s trade surplus widened unexpectedly in March
The National Institute of Statistics reported that the global trade surplus in Italy widened to €3.87 billion in March, from a revised surplus of €2.63 billion recorded in the previous month. Markets had expected Italy’s global trade surplus to narrow to €2.47 billion in March.
Japan capacity utilization rose in March
The Ministry of Economy, Trade and Industry of Japan reported that on a monthly basis, capacity utilization in Japan rose 0.4% in March, compared to a 2.6% decline recorded in the previous month.
Japan industrial production advanced more than the preliminary estimate in March
The Ministry of Economy, Trade and Industry of Japan reported that on an annual basis, the final industrial production in Japan rose 7.4% in March, higher than the preliminary estimate of a 7.0% rise and compared to a 7.0% increase recorded in the previous month.
China’s foreign direct investment climbed in April
The Ministry of Commerce of the People’s Republic of China reported that on an annual basis, actual foreign direct investment (FDI) in China climbed3.4% in April, compared to a 1.5% decline recorded in March. Markets had expected China’s actual FDI to rise 1.0% in April.
China’s MNI business sentiment index rose in May
The MNI business sentiment index in China climbed to 53.7 in May from a level of 51.1 reported in the previous month.
Good trades.