Forex Market Update - page 11
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Weekly Forex Update
The greenback finished mostly lower against the major currencies last week, as disappointing US economic data pointed to underlying softness in the nation’s economic recovery. Retail sales growth unexpectedly slowed in May, while first-time applications for jobless benefits climbed for the week ending June 7. Moreover, a gauge of US consumer sentiment slipped to the lowest level in three months in June, missing market expectations. Moreover, the USD traders remained on sidelines amid mixed opinion from the Federal Reserve (Fed) officials on the interest rate stance. The Fed. St. Louis Fed President, James Bullard, opined that the strong economic growth in the US would enable the economy to witness an earlier-than-expected hike in its short-term interest rates. However, Eric Rosengren, the President of the Boston Fed, urged the central bank to refrain from raising its short-term interest rates until the economy was “within one year” of reaching the Fed’s employment and inflation goals.
Ahead this week, market participants will focus on the Fed monetary policy meeting and the US consumer price inflation data for further directions.
Dovish comments from few European Central Bank (ECB) officials played on traders mind as the Euro declined against the USD and other peers last week. An ECB governing council member, Erkki Liikanen indicated that the central bank is ready to act in order to support price stability and the economic recovery in the region while another policymaker, Jozef Makuch indicated that the bank is ready to slash its interest rates further if latest policy measures proved insufficient.
The Pound surged against the USD last week to move closer to the 1.70 mark following hawkish comments from the Bank of England Governor, Mark Carney, wherein he announced that the central bank might initiate a hike in its benchmark interest rate sooner-than-expected, amid a steady economic recovery in the UK.
The Bank of Japan retained its monetary policy unchanged last week and reiterated that the economy is recovering moderately. Meanwhile the BoJ Deputy Governor, Kikuo Iwata, echoed BoJ’s earlier view that the central bank’s qualitative and quantitative easing policy are delivering intended results and further projected a rise in the nation’s exports with a recovery in the overseas economies.
Meanwhile, the Bank of Canada in its semi-annual Financial System Review indicated that the Canadian financial system remains robust despite lingering concern about the nation’s housing market. The bank reported that the risk of financial stress from China and other emerging economies has increased in last six months, while the risk of renewed Euro-area crisis has diminished.
The Kiwi Dollar rose sharply against the greenback, after the Reserve Bank of New Zealand raised its benchmark interest rate to 3.25% in line with market expectations and for the third time in 2014. Further, the central bank indicated that interest rates need to be hiked as strong economic growth in the nation is expected to underpin inflationary pressures.
EUR USD
Last week, the EUR traded 0.75% lower against the USD and closed at 1.3540, as few of the top ECB policymakers signaled that the central bank had still more firepower to support the Euro-zone economy. The ECB Governing Council member, Bostjan Jazbec highlighted the central bank’s willingness to deploy additional stimulus measures to prevent inflation from weakening further in the economy. Another official, Ardo Hansson opined that the central bank should mull over QE options and keep such “options on the shelf for possible use.” Also, Yves Mersch hinted that the ECB could purchase “simple and transparent” asset-backed securities to enable the Euro-zone achieve its price stability target. On the economic front, the Sentix investor confidence index in the Euro-zone fell for a second consecutive month to reach a six-month low level of 8.5 in June. Industrial output in the region rebounded more than market expectations in April. During the week, the pair traded at a high of 1.3670 and a low of 1.3511. The pair is expected to find its first support at 1.3477, with the next support expected at 1.3415. The first resistance is at 1.3636, and the next at 1.3733.
In the midst of persistent worries about the Euro-zone’s deflationary situation, traders would keep a close eye on the bloc’s inflation data.
GBP USD
In the last week, GBP traded 0.99% higher against the USD and closed at 1.6968, after the BoE Governor, Mark Carney surprised market participants on upside, hinting that the central bank could raise its benchmark interest rates from historic five-year low of 0.5% sooner-than-expected. In economic news, the ILO unemployment rate in the UK fell more than market expectations to 6.6%, the lowest level in more than five years, while employment rose by 345,000. Separately, the number of jobless claims in the nation fell 27,400 in May. Earlier during the week, the Lloyds Bank reported that its index on UK’s employment confidence rose to a level of 4.0 in May, from previous month’s reading of 1.0. In a noteworthy event, Fitch Ratings affirmed UK’s long-term foreign and local currency issuer default ratings at “AA+” with a “Stable” outlook. The pair traded at a high of 1.6993 and a low of 1.6738 in the previous week. GBPUSD is expected to find its first support at 1.6806, with the next at 1.6645. Resistance exists first at 1.7061, and then at 1.7155.
Ahead this week, market participants would keep a tab on consumer price inflation and retail sales data in the UK.
USD JPY
The USD traded 0.43% lower against the JPY over the past week, closing at 102.04. The Bank of Japan held its key interest rate unchanged and maintained its monetary policy steady, in line with market expectations. Moreover, the BoJ indicated that the Japanese economy would continue to recover moderately despite some headwinds caused by the consumption tax hike in April, while reiterating that it is confident of achieving its 2% inflation target. In economic news, data revealed that industrial production in the Japan fell 2.8% (MoM) in April, while machinery orders fell 9.1% in April from the previous month. Separately, Japan’s consumer confidence index rose for the first time in six months to a reading of 39.3 in May. Meanwhile, economy watchers’ assessment of current conditions index in Japan advanced more-than-expected to a reading of 45.1, while the index on the economic outlook rose to 53.8 in May. The pair traded at a high of 102.66 and a low of 101.61. The pair is expected to find its first support at 101.54, with the next support expected at 101.05. The first resistance is at 102.60, and the next at 103.16.
The JPY is expected to take further cues from the outcome of minutes of the BoJ latest policy meeting. Traders would also keep an eye on the Japanese trade data ahead this week.
USD CHF
USD traded 0.73% higher against the CHF and closed at 0.9001 in the last week. The CHF came under pressure after data showed that unemployment rate in Switzerland remained unchanged at seasonally adjusted 3.2% in May, against forecast for rate to fall to 3.1%. Separately, another report revealed that retail sales in the Swiss economy rose at a slower-than-anticipated pace in April. During the period, the pair traded at a high of 0.9013 and a low of 0.8918. The first support is at 0.8942, and the next at 0.8882. Resistance exists first at 0.9037, and then at 0.9072.
Apart from Swiss economic data traders will keep a tab on Swiss National Bank (SNB) monetary policy decision ahead in this week.
USD CAD
Last week, the USD traded 0.70% lower against the CAD and closed at 1.0855. The Canadian Dollar rose after the Bank of Canada (BoC) in its semi-annual Financial System Review indicated that the Canadian financial system is robust despite lingering concern about the nation’s housing market. Moreover, the Loonie advanced against major currencies, as prices of oil, Canada’s largest export item climbed amid report of unrest in Iraq and fears that oil supplies may soon be disrupted. In economic news, the Canadian new housing price index advanced 0.2% as expected in April, while annual housing starts in the nation rose more-than-expected 0.8% to a seasonally adjusted seven-month high level of 198,324 in May. USDCAD traded at a high of 1.0943 and a low of 1.0839 in the previous week. The first support is at 1.0815, with the next at 1.0775. The first resistance is at 1.0919, while the next is at 1.0983.
Ahead this week, market participants are expected to keep an eye on the Canadian consumer price inflation and retail sales data for evaluating the nation’s macro profile.
AUD USD
AUD traded 0.74% higher against the USD last week, and closed at 0.9402, following better-than-expected economic data from China, Australia’s biggest trading partner. China's industrial production and retail sales growth accelerated in May, highlighting that recovery in the world’s second largest economy is stabilizing from the recent setbacks. Consumer prices in China rose 2.5% (YoY) in May, slightly above market expectations for 2.4% and up from 1.8% in April. Moreover, upbeat domestic consumer confidence data also lifted Aussie Dollar. The Westpac consumer confidence index in Australia rose to a reading of 93.2 in June from 92.9 in May. Meanwhile, the National Australia Bank's business confidence index remained unchanged in May. Unemployment rate in Australia remained unchanged at 5.8% for third straight month in May, defying market expectations for a rise to 5.9%. During the week, the pair traded at a high of 0.9439 and a low of 0.9334. The first support is at 0.9344, and the next at 0.9287. The first resistance is at 0.9449, and the next at 0.9497.
Moving ahead, the Reserve Bank of Australia’s minutes and Governor, Glenn Stevens speech will be the key market triggers. Also, leading index from Australia and economic data from the US and China will be watched closely by traders.
Gold
In the prior week, Gold traded 1.89% higher against the USD and closed at USD1276.89, recording a second weekly gain in a row, as a string of dismal US macro data and geopolitical concerns in Middle East boosted safe-haven demand of the gold. Moreover, equity markets across the world declined last week, as worries over escalating tension in Iraq and poor global economic outlook issued by the World Bank weighed. This boosted investors appeal for the precious metal as an alternative investment. In other gold related news, the Indian Trade Secretary highlighted the need for India, the world’s second largest consumer of gold, to “rationalize” its duty on gold imports. The yellow metal traded at a high of 1278.08 and a low of 1250.36 in the previous week. Gold is expected to find support at 1258.81 and the next at 1240.72. The first resistance is at 1286.53, while the next is at 1296.16.
Moving ahead this week, traders would keep a close tab on the Fed monetary policy decision to gauge the timing for an interest rate hike in the wake of recent mixed economic data released in the US.
Crude Oil
Oil prices surged to a nine month high, rallying 4.14% against the USD last week to USD106.91, as escalating violence in Iraq raised concerns on the oil supplies from the second-largest oil producer of the Organization of the Petroleum Exporting Countries (OPEC). Oil prices were pushed higher amid faltering talks between Ukraine and Russia over former’s gas payment to Russia. Oil prices also rose, as the US Energy Information Administration in its weekly report, indicated that crude stockpiles fell 2.6 million barrels for the week ended June 6, while a report from the American Petroleum Institute showed that US crude inventories rose by 1.45 million barrels for the similar period. Meanwhile, in its monthly oil report, OPEC projected that the global oil demand would rise by 1.14 million barrels a day in 2014. Oil traded at a high of 107.68 and a low of 102.72 in the previous week. Oil has its first major support at 103.86, while the next support exists at 100.81. The first resistance is at 108.82, and the next at 110.73.
Ahead this week, oil traders are likely to remain on edge amid escalating tensions in Iraq with rising speculation that the nation is moving closer to a civil war.
Good trades.
Forex Market Update 17Jun14
This morning, the greenback is trading higher against most of the major currencies, ahead of the outcome of the Fed FOMC meeting.
The EUR is trading lower against the USD, hurt by the latest batch of mixed economic releases from the Euro-zone and the German economy. Earlier today, ECB’s Luis María Linde reinforced the common view that economic recovery in the region remained fragile while hinting towards a risk of destabilization in the global financial markets.
Demand for the GBP fell after consumer prices in the UK economy fell more-than-expected in May. However, earlier BoE’s David Miles signaled his intention to vote for an interest rate hike in the Britain economy by May of 2015.
The AUD lost ground after the minutes from the RBA’s June policy meeting hinted that the central bank would continue with its accommodative monetary policy for a longer time as a weak mining investment, coupled with a stubbornly stronger Aussie could risk Australia’s economic growth.
Yesterday, in the New York session, the greenback traded lower against the key currencies, as the IMF slashed its 2014 growth-forecast on the world’s largest economy, adding that the US would not reach full employment until the end of 2017. Furthermore, the IMF Chief, Christine Lagarde opined that a gradual hike in the US interest rate could prove beneficial for the economy, which according to her could come well after the mid-2015.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3560 against the USD, 0.10% lower from the New York close. In economic news, the ZEW economic sentiment in Germany fell for the six consecutive months to reach its lowest level in 18 months however ZEW index on German current situation improved in June. Also, ZEW's readings on Euro-zone’s economic sentiment posted a modest rise in June. During the session, the pair traded at a high of 1.3588 and a low of 1.3559. Yesterday, the EUR traded 0.13% higher against the USD in the New York session, and closed at 1.3573.
The pair is expected to find its first support at 1.3527 and first resistance at 1.3590.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6965 against the USD, 0.11% lower from the New York close, after data showed that consumer prices in the UK economy on a yearly basis fell more than market expectations to reach its lowest level in 4-1/2 years in May. However, BoE’s David Miles, citing strong economic growth in the UK, hinted that he would vote for an interest rate hike by May 2015. During the session, the pair traded at a high of 1.6989 and a low of 1.6957. Yesterday, the British Pound traded a tad higher versus the Dollar in the New York session, and closed at 1.6984.
The pair is expected to find its first support at 1.6937 and first resistance at 1.6994.
USD JPY
The USD is trading at 102.01 against the JPY at 9:40 GMT this morning, 0.19% higher from the New York close. Amid a lack of economic releases from Japan, traders are expected to keep a tab on global economic news for further cues in the currency pair. During the session, the pair traded at a high of 102.09 and a low of 101.84. In the New York session yesterday, the USD traded marginally lower against the JPY, and closed at 101.82, as escalating tensions in Iraq and Ukraine bolstered the safe-haven appeal of the Japanese Yen.
The pair is expected to find its first support at 101.81 and first resistance at 102.15.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8988 against the Swiss Franc, 0.18% higher from the New York close. Earlier today, the Swiss government slashed its growth forecast on Switzerland to 2.0% and 2.6% for 2014 and 2015, from its earlier estimate of 2.2% and 2.7%, respectively. Separately, data revealed that producer and import prices in the Swiss economy continued to decline in May. During the session, the pair traded at a high of 0.8992 and a low of 0.8969. In the New York session yesterday, the USD traded 0.13% lower against the CHF, and closed at 0.8972.
The pair is expected to find its first support at 0.8966 and first resistance at 0.9006.
USD CAD
At 9:40 GMT, the USD is trading at 1.0857 against the CAD, 0.12% higher from the New York close. During the session, the pair traded at a high of 1.0861 and a low of 1.0846. Yesterday, the USD traded 0.24% lower against the CAD in the New York session, and closed at 1.0844. On the economic front, existing homes sales in Canada posted its largest month-on-month increase in nearly four years in May. Meanwhile, another report showed that foreign inventors invested $10.13 billion in Canadian securities while Canadian investors invested $2.49 billion in foreign portfolio.
The pair is expected to find its first support at 1.0833 and first resistance at 1.0883.
AUD USD
The AUD is trading at 0.9357 against the USD, at 9:40 GMT this morning, 0.46% lower from the New York close, after the minutes for RBA’s June policy meeting highlighted the economic perils of a persistent stronger Aussie while hinting that the central bank could keep its accommodative policy stance in place for a longer time than expected. During the session, the pair traded at a high of 0.9402 and a low of 0.9344. AUD traded 0.19% higher against the USD in the New York session, and closed at 0.9400.
The pair is expected to find its first support at 0.9327 and first resistance at 0.9397.
Gold
At 9:40 GMT, Gold is trading at $1265.00 per ounce, 0.51% lower from the New York close, as reports showed that holding in the SPDR Gold Trust fell 4.20 tons to 782.88 tons on Monday and after the Indian Government hiked tariff on imports of gold and silver to the nation. This morning, Gold traded at a high of $1273.50 and a low of $1262.80 per ounce. In the New York session yesterday, the yellow metal traded 0.70% lower, and closed at $1271.50, amid profit-taking. However, escalating tensions in Iraq and Ukraine, kept the commodity’s losses in check.
Gold has its first support at $1257.53 and first resistance at $1277.73.
Silver
Silver is trading at $19.60 per ounce, 0.36% lower from the New York close, at 9:40 GMT this morning. Negative sentiment for the white metal was fueled after reports showed that Indian Government hiked its tariff on imports of gold and silver to India. This morning, Silver traded at a high of $19.69 and a low of $19.52. Silver traded 0.08% lower against the USD in the New York session, and closed at $19.67.
Silver has its first support at $19.50 and first resistance at $19.73.
Crude Oil
At 9:40 GMT, Oil is trading at $106.40 per barrel, 0.20% lower from the New York close. This morning, Oil traded at a high of $106.84 and a low of $106.01. Yesterday, Oil traded 0.33% lower in the New York session, and closed at $106.60, as concerns on the supply-outlook of the commodity eased after Iraq’s Government deployed additional troops at its oilfields and as Libya’s El Feel oilfield reopened after two months of blockage. Additionally, the EIA indicated that the crude oil exports in the US stood at its highest level in 15 years in April.
It has its first support at $105.86 and first resistance at $107.09.
Economic Snapshot
UK CPI rose less than anticipated in May
On an annual basis, the consumer price index (CPI) in the UK rose 1.5% in May, compared to 1.8% rise recorded in the previous month. Markets were expecting the consumer price index to rise 1.7% in May.
UK retail price index rose less than expectations in May
On a monthly basis, the retail price index in the UK advanced 0.1% to a level of 255.9 in May, compared to a 0.4% increase recorded in the previous month. Markets were expecting the retail price index to rise 0.2% in May.
UK ONS house prices rose in April
On an annual basis, the house price index in the UK climbed 9.9% in April, compared to an 8.0% increase recorded in the previous month.
Euro-zone ZEW economic sentiment climbed in June
The ZEW economic sentiment index in the Euro-zone climbed to a level of 58.4 in June, compared to a level of 55.2 recorded in the previous month.
German ZEW economic sentiment dropped unexpectedly in June
The ZEW economic sentiment index in Germany dropped to a level of 29.8 in June from a level of 33.1 reported in the previous month and against the market expectations of a rise to a level of 35.0. Meanwhile, the ZEW current situation index in Germany rose to a level of 67.7 in June, compared to a reading of 62.1 reported in the previous month.
Italy’s trade surplus narrowed in April
Italy’s global trade surplus narrowed to €3.5 billion in April from a revised surplus of €3.9 billion recorded in the previous month.
Swiss government trimmed its 2014 and 2015 growth forecasts
Switzerland’s State Secretariat for Economics (SECO) slashed its domestic economic growth forecast for 2014 to 2.0% from 2.2% and 2015 growth outlook to 2.6% from 2.7% it had estimated in March 2014, citing a sluggish outlook for exports on the back of the fragile global economic recovery.
Swiss producer and import prices rebounded in May
On a monthly basis, the producer and import price index in Switzerland climbed 0.1% in May, compared to a 0.3% decrease reported in the previous month.
RBA minutes indicated low rates to remain in place “for some time yet”
The minutes of the Reserve Bank of Australia’s (RBA) monetary policy meeting held on 03 June, 2014 revealed that the current accommodative monetary policy is expected to remain in place in the foreseeable future.
China’s foreign direct investment declined unexpectedly in May
On an annual basis, actual foreign direct investment (FDI) in China dropped 6.7% in May, compared to a 3.4% rise recorded in the previous month. Markets had expected China’s actual FDI to rise 3.2% in May.
Good trades.
EUR USD
The pair is expected to find its first support at 1.3573 and first resistance at 1.3670.
GBP USD
The pair is expected to find its first support at 1.6950 and first resistance at 1.7060.
USD JPY
The pair is expected to find its first support at 101.53 and first resistance at 102.17.
USD CHF
The pair is expected to find its first support at 0.8900 and first resistance at 0.8977.
USD CAD
The pair is expected to find its first support at 1.0781 and first resistance at 1.0873.
AUD USD
The pair is expected to find its first support at 0.9353 and first resistance at 0.9466.
Gold
Gold has its first support at $1272.03 and first resistance at $1287.43.
Silver
Silver has its first support at $19.78 and first resistance at $20.05.
Crude Oil
It has its first support at $105.74 and first resistance at $106.85.
Economic Snapshot
UK retail sales declined in May
Italy’s current account surplus widened in April
SNB kept its key interest rate unchanged
Japan all industry activity index declined more than anticipated in April
Japan’s final leading economic index declined in April
Australia RBA foreign exchange transaction rose in May
Always reliable info. good analysis.
I only it comes earlier before the market opens :-)
Weekly Forex Update
The greenback failed to garner traction against most of the major currencies last week, as Federal Reserve’s (Fed) dovish outlook on the US economy prompted traders to shun the safe haven currency. The Fed trimmed its growth estimates on the world’s largest economy by projecting the US economy to register growth between 2.1% to 2.3% this year, down from its earlier forecast of economic growth between 2.8% to 3.0%. Moreover, the Fed Chief, Janet Yellen, at a press conference, following the central bank’s decision to taper its quantitative easing package by another $10 billion, hinted that the US Fed would not raise its short-term interest rates from record lows anytime soon.
In economic news, official data showed that jobless claims in the US economy fell by 6,000, more than market expectations, in the week ended June 14. The Philadelphia Fed manufacturing index advanced to an 8-month high of 17.8 in May. Separately, the CB leading indicators rose 0.5% (MoM) in May, for the fourth straight month. Consumer prices in the US rose at their fastest pace on an annual basis in May, reflecting broad-based price growth.
In the midst of deflationary concerns surrounding the Euro-zone, the European Central Bank (ECB) Vice-President, Vitor Constancio hinted that the central bank could roll out an asset purchase programme in case of a situation where the risk of deflationary pressures increases further in the bloc.
The Pound advanced, after the Bank of England (BoE) minutes offered a hawkish view of its plan to hike interest rates. The minutes also revealed that the central bank policymakers voted unanimously to keep the key interest rate unchanged at 0.5% and maintain the asset purchase programme at £375 billion.
The Japanese Yen gained traction, after the minutes from the Bank of Japan’s (BoJ) latest policy meeting, revealed that the members of the monetary policy board believe that the nation's economy is expected to continue its moderate recovery.
Meanwhile, at its policy meeting, the Swiss National Bank (SNB) maintained its interest rate close to zero and reiterated its pledge to intervene in the currency market to prevent the Swiss Franc from strengthening beyond 1.20 against the Euro. The SNB Governor, Thomas Jordan hinted at the possibility to introduce negative interest rates to address domestic deflationary pressures in case situation demands.
The Aussie Dollar backpedalled, after the minutes of the Reserve Bank of Australia’s (RBA) latest policy meeting gave a pessimistic view about the domestic economy.
EUR USD
Last week, the EUR traded 0.44% higher against the USD and closed at 1.3600. The greenback lost ground after the US Fed lowered its 2014 economic growth forecast and dashed any expectations of an early interest rate hikes. In the Euro-zone, the ECB Vice President, Vitor Constancio hinted that the central bank stands ready to deploy additional unconventional instruments, including asset-purchase programme, to tackle soft inflation. Separately, the IMF Managing Director, Christine Lagarde, urged the ECB to implement quantitative easing, if inflation in the bloc remains low for a protracted period of time. In economic news, the Euro-zone employment grew for the second straight quarter in the first three months of 2014, while annual consumer inflation rate dropped to a five-year low level of 0.5% in May. Construction output in the region expanded 0.8% (MoM) in April. The German ZEW economic sentiment deteriorated for the sixth consecutive month in June, even as the index on current economic situation rose to a level of 67.7, the highest since July 2011. During the week, the pair traded at a high of 1.3644 and a low of 1.3512. The pair is expected to find its first support at 1.3527, with the next support expected at 1.3453. The first resistance is at 1.3659, and the next at 1.3717.
Going forward, manufacturing and services PMIs across the Europe will provide further cues to the Euro.
GBP USD
The GBP advanced 0.27% against the USD last week and closed at 1.7013, after the minutes of the BoE’s latest policy meeting hinted at the possibility for the central bank to raise interest rates before the end of 2014. Furthermore, the minutes revealed that all Monetary Policy Committee (MPC) members voted unanimously to keep the BoE's benchmark interest rate at a 0.5% and the size of its bond-purchase programme at £375 billion. Moreover, the MPC member, Martin Weale, stated that the central bank should start raising its interest rates soon, while another BoE policymaker, Ian McCafferty, echoed similar view that a rate hike will be dependent on the economic performance going ahead. In economic news, retail sales in the UK dropped in May, for the first time since January, while the CBI industrial order expectations improved more than market expectations to a 6-month high in April. Meanwhile, inflation in the UK eased to a 55-month low in May. The pair traded at a high of 1.7064 and a low of 1.6920 in the previous week. GBPUSD is expected to find its first support at 1.6934, with the next at 1.6855. Resistance exists first at 1.7078, and then at 1.7143.
Ahead this week, market participants will keep a close watch on the final UK GDP data for the first quarter of 2014. Also inflation hearings and housing report will be crucial for the Pound.
USD JPY
The USD finished a tad higher against the JPY to close at 102.07, after remaining under pressure for most of the week, following the Fed’s decision to slash its 2014 economic growth forecast for the US economy. Meanwhile, the minutes of the BoJ latest monetary policy meeting held in May revealed that policymakers were of the view that the central bank’s massive policy measures are having the desired effects on the economy. Economic data showed that, total merchandise trade deficit in Japan widened to ¥909.0 billion in May. Japan's leading economic index declined to a level of 106.5 in April, its lowest reading since March 2013, while its coincident index stood unchanged at 111.1 in April. All industry activity fell more-than-expected 4.3% (MoM) in April, following a 1.5% rise in the previous month. The pair traded at a high of 102.37 and a low of 101.72. The pair is expected to find its first support at 101.73, with the next support expected at 101.39. The first resistance is at 102.39, and the next at 102.71.
Yen traders are expected to remain busy this week, amid a barrage of domestic macroeconomic news including Japanese industrial production, unemployment, retail trade and consumer price inflation data.
USD CHF
USD traded 0.56% lower against the CHF and closed at 0.8951 in the last week. The Swiss Franc rose after the SNB kept its key interest rate unchanged at zero and reiterated its pledge to intervene in the currency market to prevent the Swiss Franc from surpassing 1.20 against the Euro. The central bank further stated that it is prepared to purchase foreign currency in unlimited quantities and take further measures including negative interest rate, if necessary. Furthermore, the SNB President, Thomas Jordan, projected that the Swiss economy would continue with its moderate pace of recovery in coming quarters, despite an extremely challenging climate due to weak growth in the Euro-area. In economic releases, the ZEW survey on the economic expectation from the Swiss economy fell to an 11-month low reading of 4.8 in June. Moreover, the State Secretariat for Economics (SECO) trimmed its growth estimates on the Swiss economy to 2.0% for 2014 and 2.6% for 2015, from its earlier projections of 2.2% and 2.7%, respectively. During the period, the pair traded at a high of 0.9014 and a low of 0.8911. The first support is at 0.8903, and the next at 0.8856. Resistance exists first at 0.9006, and then at 0.9062.
Ahead this week, market participants will keep a close watch on Swiss trade balance report along with a slew of macroeconomic releases in the US for further direction.
USD CAD
Last week, the USD traded 0.89% lower against the CAD and closed at 1.0758, after the US Fed lowered its growth forecast for 2014 and stated that it might keep interest rates near its current record low levels for some more time. Meanwhile, the Loonie jumped against the greenback on Friday, following the release of record-high retail sales and higher-than-expected inflation data in Canada. Retail sales rose 1.1% (MoM) in April, exceeding market expectations for a 0.6% gain and after an increase of 0.1% in March. A separate report showed that consumer price inflation in Canada rose 0.5% last month, compared to expectations for a 0.2% gain and following a 0.3% rise in April. In other economic data, wholesale sales in Canada rose 1.2% (MoM) in May, compared to market expectations for a 0.5% rise in April, after falling 0.3% (MoM) in the previous month. USDCAD traded at a high of 1.0898 and a low of 1.0749 in the previous week. The first support is at 1.0705, with the next at 1.0653.
The first resistance is at 1.0854, while the next is at 1.0951.
With a light economic calendar, the Loonie traders would focus on global economic news for further guidance.
AUD USD
AUD traded 0.15% lower against the USD last week, and closed at 0.9388, following the release of the minutes of the RBA’s June board meeting. The minutes revealed that the central bank would keep its current accommodative monetary policy in place for foreseeable future, citing a weak investment environment in the Australian mining sector. The minutes further cautioned that a stronger Australian dollar could weigh on the nation’s growth prospects. Sentiments towards Aussie Dollar were also dented, after the RBA Assistant Governor, Christopher Kent, opined that the unemployment rate in Australia is likely to remain relatively high for the next two years. In economic news, the CB leading index in Australia fell 0.1% in April, while Westpac leading index edged up 0.1% in May, following a 0.5% drop in the preceding month. During the week, the pair traded at a high of 0.9433 and a low of 0.9320. The first support is at 0.9328, and the next at 0.9267. The first resistance is at 0.9441, and the next at 0.9493.
With not much on the domestic economic calendar during the next week, the direction of the AUD is likely to be determined from external factors.
Gold
The yellow metal extended its previous week’s rally, rising 2.97% to close at USD1314.85, buoyed by dovish comments from the US Fed chief Janet Yellen and amid concerns that the US may be dragged deeper into Iraq crisis. The US Fed on Wednesday left its benchmark interest rates unchanged at 0.00-0.25% and shaved another $10 billion from its monthly bond-buying program, in-line with market expectations. The greenback came under pressure after the central bank hinted that it might delay its process to hike interest rates and trimmed its growth-forecast on the US economy for 2014. Gold prices also advanced as traders continued to fret over lingering geo-political turmoil in Iraq. In other gold related news, China Gold Association President, Xin Song projected private sector gold demand in China, the world’s second largest consumer of gold, to remain flat to slightly lower in 2014. The yellow metal traded at a high of 1322.41 and a low of 1258.14 in the previous week. Gold is expected to find support at 1274.52 and the next at 1234.20. The first resistance is at 1338.79, while the next is at 1362.74.
In the week ahead, traders would focus on the US macro-economic indicators for further guidance to gold prices.
Crude Oil
Oil prices traded 0.33% higher against the USD in the last week and closed at USD107.26, propelled by ongoing tensions in Iraq that threatens to cause disruptions in the supply of the commodity from the nation, the second largest producer of oil in the OPEC. Tensions escalated even as the US intervened and agreed to send military advisers to Iraq in an effort to end the violence. Oil prices also rose after the Energy Information Administration reported 579,000 barrels drop in the US crude stockpiles to 386.5 million barrels for the week ended June 13. Also, the American Petroleum Institute indicated a more-than-expected 5.7 million barrels drop in the US crude stockpiles for the similar period. Oil traded at a high of 107.73 and a low of 105.32 in the previous week. Oil has its first major support at 105.81, while the next support exists at 104.36. The first resistance is at 108.22, and the next at 109.18.
Ahead this week, existing and new home sales data along with durable goods and final Q1 GDP data from the US would remain on investors’ radar. Oil traders will also keep a close eye on developments in Iraq.
Good trades.
EUR USD
The pair is expected to find its first support at 1.3587 and first resistance at 1.3641.
GBP USD
The pair is expected to find its first support at 1.6970 and first resistance at 1.7029.
USD JPY
The pair is expected to find its first support at 101.78 and first resistance at 101.99.
USD CHF
The pair is expected to find its first support at 0.8911 and first resistance at 0.8957.
USD CAD
The pair is expected to find its first support at 1.0708 and first resistance at 1.0740.
AUD USD
The pair is expected to find its first support at 0.9381 and first resistance at 0.9435.
Gold
Gold has its first support at $1313.73 and first resistance at $1329.73.
Silver
Silver has its first support at $20.84 and first resistance at $21.26.
Crude Oil
It has its first support at $105.05 and first resistance at $106.90.
Economic Snapshot
UK mortgage approvals declined in May, indicated BBA
Interest rate hike would be limited and gradual, indicated Carney
German Ifo business climate declined more than expected in June
Italian wage inflation rose in May
Italian trade surplus widened in May
Swiss trade surplus widened more than expected in May
Chinese CB leading index rose at a slower pace in May
EUR USD
The pair is expected to find its first support at 1.3593 and first resistance at 1.3645.
GBP USD
The pair is expected to find its first support at 1.6983 and first resistance at 1.7056.
USD JPY
The pair is expected to find its first support at 101.58 and first resistance at 101.93.
USD CHF
The pair is expected to find its first support at 0.8915 and first resistance at 0.8954.
USD CAD
The pair is expected to find its first support at 1.0691 and first resistance at 1.0737.
AUD USD
The pair is expected to find its first support at 0.9375 and first resistance at 0.9432.
Gold
Gold has its first support at $1305.07 and first resistance at $1321.87.
Silver
Silver has its first support at $20.71 and first resistance at $21.09.
Crude Oil
It has its first support at $105.68 and first resistance at $107.06.
Economic Snapshot
BoE tightened mortgage-lending rules
French consumer confidence increased unexpectedly in June
Australian job vacancies rose in March to May quarter
Weekly Forex Update
The greenback extended its losing streak, after the latest batch of weaker-than-expected US economic data added to signs of an uneven recovery in the world’s largest economy. The US economy contracted more than previously estimated in the first quarter of 2014, suggesting that the nation’s recovery has further to go before the Federal Reserve (Fed) raises interest rates. Data released by the US Labor Department showed a modest decrease in initial jobless claims for the week ended June 21. Additionally, the durable goods orders in the US unexpectedly declined in May.
However, hawkish comments by few eminent Fed policy makers provided some much needed relief to USD traders. The Richmond Fed President, Jeffrey Lacker, opined that the nation’s inflation would be firmer this year, while James Bullard, St. Louis’s Fed chief indicated that the central bank’s first interest-rate increase would happen in the first quarter of next year. He also opined that the nation’s unemployment rate is on track to fall below 6% and inflation is expected to rise back to 2% by the end of 2014. The greenback was also supported by better-than-expected consumer sentiment data released on Friday.
Meanwhile, the European Central Bank (ECB) Governing Council member, Ewald Nowotny highlighted central bank’s concerns over appreciation of the Euro and cautioned that further increase in the value of the EUR could keep the region’s inflation rate below the bank's 2.0% target.
In the midst of deflation worries surrounding the Euro-zone, the ECB’s policy meeting on Thursday is undoubtedly the highlight of this week, while the Eurozone’s preliminary inflation numbers will also be closely watched.
Last week, the Bank of England’s (BoE) Financial Policy Committee led by Governor Mark Carney introduced new measures to limit riskier home loans and consumer debt. The Pound touched the highest levels in more than five years against its US peer, after traders reacted positively to the BoE’s new measures to control burgeoning UK housing market. Moreover, the BoE Governor assured that new measures would not have any impact on monetary policy including the central bank’s interest rate schedule.
The Japanese Yen advanced against the USD, as better-than-expected domestic retail sales and unemployment data painted a positive picture for the economy.
EUR USD
Last week, the EUR traded 0.36% higher against the USD and closed at 1.3649, despite the release of dismal economic data from Europe. The economic sentiment index in the region weakened unexpectedly in June from a 34-month high in May. The German Ifo business confidence deteriorated for the second straight month in June, highlighting that geopolitical tensions in Eastern Europe and the Middle East continued to weigh on investors’ sentiment and overall business outlook. Also, the French business confidence weakened marginally in June, while the number of people unemployed in France rose to a new record high in May. Moreover, the dismal regional PMI data released earlier during the week suggested that recovery in the bloc continues to remain uneven and fragile. During the week, the pair traded at a high of 1.3652 and a low of 1.3573. The pair is expected to find its first support at 1.3597, with the next support expected at 1.3546. The first resistance is at 1.3676, and the next at 1.3704.
Amid recent spate of dovish comments by various ECB officials, investors will keep a tab on the outcome of ECB’s monetary policy meeting. Also inflation, retail sales and unemployment data from the Euro-zone will remain on investors’ radar.
GBP USD
In the last week, GBP traded 0.13% higher against the USD and closed at 1.7035, after the BoE announced measures to address UK housing market concerns, which were broadly in line with market expectations. The domestic currency was also buoyed by the BoE Governor, Mark Carney’s remarks who indicated that the central bank’s new measures to control mortgage lending were less likely to have implications on monetary policy, which currently anticipates limited and gradual rise in the interest rates. In economic news, the UK GfK consumer confidence index recorded first positive reading in since March 2005 in June, reinforcing signs of steady recovery in the nation. Additionally, current account deficit narrowed during the first quarter. However, the UK annual GDP data indicated that the nation’s economic growth was revised down for the first quarter of 2014. The pair traded at a high of 1.7052 and a low of 1.6952 in the previous week. GBPUSD is expected to find its first support at 1.6974, with the next at 1.6913. Resistance exists first at 1.7074, and then at 1.7113.
Housing and manufacturing data from the UK would be the main triggers that will provide further direction to Sterling ahead this week.
USD JPY
The USD traded 0.64% lower against the JPY over the past week, closing at 101.42, amid dismal economic data from the US. The Japanese Yen rose after data indicated that consumer prices in Japan rose at an annual rate of 3.4% in May, the fastest pace in 32 years. Unemployment rate in the world’s third largest economy unexpectedly fell to 3.5% in May, while Japan’s manufacturing PMI rose to a reading of 51.1 In May. Additionally, annual retail sales fell less than market anticipated in May. During the week, the Japanese Prime Minister, Shinzo Abe, outlined long awaited growth strategy that included a string of proposed reforms to the labor regulations, government pension fund investments, corporate governance and tax policies. The pair traded at a high of 102.18 and a low of 101.31. The pair is expected to find its first support at 101.10, with the next support expected at 100.77. The first resistance is at 101.96, and the next at 102.50.
Apart from external cues, the Yen traders would keep eye on industrial production, housing and construction data from Japan later this week.
USD CHF
The greenback fell 0.48% against the CHF and closed at 0.8908 in the last week, after the data indicated that the US economy shark more than market expectations for the first quarter of 2014. The Swiss Franc advanced, following the release of better-than-expected economic data from Switzerland. The Swiss trade surplus widened more-than-expected in May. The KOF leading indicator in Switzerland rose in June, surpassing market expectations, while the UBS consumption indicator strengthened in May. In its quarterly bulletin, the Swiss National Bank (SNB) projected the economy to register a moderate pace of recovery in the coming quarters with a growth rate of around 2.0% for 2014. During the week, the SNB chief, Thomas Jordan, indicated that the Swiss Franc still remains high at current levels and that the central bank’s decision to maintain the minimum exchange rate remains the right measure to ensure appropriate monetary conditions in Switzerland. During the period, the pair traded at a high of 0.8970 and a low of 0.8906. The first support is at 0.8886, and the next at 0.8864. Resistance exists first at 0.8950, and then at 0.8992.
Amid a lack of major economic releases from Switzerland ahead this week, traders would keep a tab on global economic news for further cues.
USD CAD
Last week, the USD traded 0.86% lower against the CAD and closed at 1.0666, as the latest batch of sluggish US economic data clearly weighed on the demand for the greenback and pushed the Canadian Dollar up against its US counterpart. On Friday, the Statistics Canada reported that the raw material price index in the nation eased 0.4% in May, compared to a rise of 0.1% in the preceding month. Markets were expecting the raw material price index to fall 0.1% in May. Separately, on a monthly basis industrial product price in Canada dropped 0.5% in May, compared to a 0.2% fall recorded in the previous month. USDCAD traded at a high of 1.0755 and a low of 1.0658 in the previous week. The first support is at 1.0631, with the next at 1.0596. The first resistance is at 1.0728, while the next is at 1.0790.
Apart from external cues, the Loonie traders would keep a tab on the Canadian GDP and trade data ahead this week.
AUD USD
AUD traded 0.42% higher against the USD last week, and closed at 0.9427, as disappointing US growth data for the first quarter and lackluster durable goods order pressurized the greenback. Furthermore, last week’s upbeat preliminary Chinese manufacturing PMI indicated a pickup in industrial activity in the second largest economy and kept the Aussie Dollar supported. During the week, the Reserve Bank of Australia’s (RBA) board member, John Edwards, expressed confidence that the Australian economy would withstand a slump in its mining sector. He opined that the economy would benefit from the low interest rates and infrastructure spending in other sectors. Furthermore, he stated that a weaker Aussie could help the nation in achieving 3.0% GDP growth, instead of an earlier target of 2.0% growth, over the next five to six years. During the week, the pair traded at a high of 0.9447 and a low of 0.9354. The first support is at 0.9372, and the next at 0.9316. The first resistance is at 0.9465, and the next at 0.9502.
In the week ahead, investors have their plate full with a raft of economic data scheduled for release in Australia including retail sales, building permit and trade data. Moreover, RBA’s monetary policy meeting will be closely scrutinized for further movements in the AUD.
Gold
The yellow metal rallied for the fourth consecutive week against the greenback, rising 0.10% to finish at 1316.18, as the latest batch of uninspiring economic data from the US weighed on the greenback and pushed investors to take refuge under the safe-haven metal. Weakness in the US equity markets and lingering geo-political tensions in Iraq, further bolstered the demand-outlook of the precious metal. However, soft demand for physical gold and profit-booking, kept the commodity’s gains in check. The yellow metal traded at a high of 1325.92 and a low of 1305.21 in the previous week. Gold is expected to find support at 1305.62 and the next at 1295.06. The first resistance is at 1326.33, while the next is at 1336.48.
Although the Fed’s outlook for the employment in the US has brought little satisfaction, traders would pay close attention to crucial unemployment rate and non-farm payrolls data in the US ahead this week.
Crude Oil
Oil prices traded 1.42% lower against the USD in the last week and closed at USD105.74, amid profit-taking and as supply concerns from the Middle East region eased. US military presence in Iraq brought increased confidence among oil traders over the security of the country's oil exports, while another report showed that Libya’s El Feel oil field increased its oil production. Additionally, oil prices also came under pressure as lackluster manufacturing PMI data from the Euro-zone and its member nations spurred fresh concerns on the demand-outlook of the commodity. Also the Energy Information Administration reported that US crude inventories rose by 1.74 million barrels to 388.0 million barrels for the week ended June 20, while the American Petroleum Institute reported that the US crude inventories rose by 4.0 million barrels to 382.6 million barrels for the similar week. Oil traded at a high of 107.50 and a low of 105.03 in the previous week. Oil has its first major support at 104.68, while the next support exists at 103.62. The first resistance is at 107.15, and the next at 108.56.
In the week ahead, oil traders will closely scrutinize the US nonfarm payrolls data for further indications on the strength of the labor market, while key manufacturing data from China and Europe will also be in focus.
Good trades.
EUR USD
The ECB’s monthly report would remain the key trigger during this week’s market action as it would provide detailed analysis of prevailing economic situation in the region. Market participants would also keep a close eye on a spate of German macroeconomic data including industrial production, trade and inflation numbers.
GBP USD
Ahead this week, investors will keep a tab on the domestic manufacturing and industrial production and NIESR GDP estimate to gauge the strength of economic recovery in Britain. Additionally, the BoE monetary policy meeting scheduled on Thursday will be closely watched for hints on the timing of a probable interest rate hike.
USD JPY
Yen traders are expected to remain busy this week, amid a barrage of domestic macroeconomic data including machinery orders, trade balance, consumer confidence, leading economic and coincident indicators. Separately all eyes would also be on the Bank of Japan’s interest rate decision.
USD CHF
Ahead in the week, investors are expected to closely track the Swiss consumer price inflation data. Additionally, retail sales data from Switzerland would also act as a key catalyst in determining the direction of the Swiss Franc.
USD CAD
Ahead this week, investors have their plate full with a raft of economic data including building permits, housing starts and Ivey manufacturing index, scheduled for release from Canada. Moreover, employment data for June and the Bank of Canada’s business outlook survey for second quarter will also remain crucial.
AUD USD
Traders look forward to the NAB's business confidence, Westpac consumer confidence and employment data from Australia ahead this week.
Gold
Traders look forward to the outcome of the FOMC minutes and economic data from the US. Also, monetary policy meeting from the Bank of England and the Bank of Japan will generate market interest.
Crude Oil
In the week ahead, investors will focus on the minutes from the Fed’s latest monetary policy meeting, due on Wednesday, for further insight on the central bank's view on the US economy.
Weekly Forex Update
The greenback finished mostly lower against key currencies, after minutes of the latest Federal Open Market Committee (FOMC) meeting offered no clarity over the probable timing of an interest rate hike in the US. However, the minutes also revealed that the Federal Reserve (Fed) officials had decided to end the central bank’s bond-buying programme by October 2014.
Meanwhile, the Minneapolis Fed President, Narayana Kocherlakota, reaffirmed his dovish view by stating that the US job market is still too weak and inflation too low. He opined that the central bank should not rush to increase the short term interest rates, as the economy is still far from strong recovery. However, Kansas City Federal Reserve President, Esther George, sounded optimistic as she opined that the recent positive developments in the US labor market and the inflation rates rising closer to its target signaled for an interest rate hike as early as this year.
On Friday, the US Dollar was in demand supported by better-than-expected initial jobless claims data. The Labor Department reported an unexpected drop in first-time claims for US unemployment benefits for the week ended July 5. The US consumer credit rose nearly in line with market estimates, while wholesale inventories rose by slightly less-than-anticipated in May.
The Euro came under pressure earlier, as risk aversion increased amid concerns over the fiscal stability of Portugal’s largest lender, Banco Espirito Santo. However, the common currency recouped its losses, after Portugal’s central bank calmed investors’ nerves, stating that the Banco Espirito Santo does not need extra funds and that it has sufficient finances to deal with its parent company's debt problems.
The Pound traded lower after industrial and manufacturing production in the UK unexpectedly declined, while trade deficit widened surprisingly in May. Moreover, the British Chambers of Commerce (BCC) cautioned that the Bank of England (BoE) should not make any swift decisions to raise interest rates, citing that such measures could limit nation’s growth. Meanwhile, the Bank of England (BoE) left its benchmark interest rate unchanged at 0.5% and maintained its asset purchase facility steady at £375 billion, in line with market expectations.
On Friday, the Statistics Canada reported that unemployment rate in the nation climbed to 7.1% in June, while the economy lost 9,400 jobs in June, missing market expectations for a 20,000 rise, after an increase of 25,800 in the previous month. Disappointing Canadian jobs data proved dampener for the local currency, suppressing the prospect for the Bank of Canada to raise interest rates.
EUR USD
Last week, the EUR traded 0.10% higher against the USD and closed at 1.3608. However, the single currency remained under pressure as a slew of dismal economic data fuelled concerns over the recovery in the region. The French current account deficit widened in May, while industrial production declined unexpectedly. In Germany, manufacturing turnover declined and industrial production slipped at the sharpest pace since April 2012 in May. Moreover, sentiments towards the Euro was hit by growing fears over financial troubles at the holding companies of Portugal's largest listed bank, Banco Espirito Santo. Meanwhile, the European Central Bank (ECB) Governing Council member, Ewald Nowotny, rejected calls for additional stimulus measures while another ECB official, Ignazio Visco hinted that the ECB would consider new policy measures, including quantitative easing program, to lift inflation rate in the economy to its 2.0% target. During the week, the pair traded at a high of 1.3652 and a low of 1.3576. The pair is expected to find its first support at 1.3572, with the next support expected at 1.3536. The first resistance is at 1.3648, and the next at 1.3688.
The Euro-zone’s consumer price inflation data would be the key trigger during this week’s market action.
GBP USD
In the last week, GBP traded 0.26% lower against the USD and closed at 1.7116, following the release of dismal economic data in the UK. Industrial production fell 0.7% (MoM) in May, following a revised rise of 0.3% recorded in April. On a similar note, manufacturing production on a monthly basis, dropped 1.3% in May, following a revised rise of 0.3% recorded in the preceding month. Trade deficit in UK widened to £2.4 billion in May. Meanwhile, industry think tank, the BCC warned that prematurely raising interest rates might disrupt economic recovery in the nation. At its policy meeting, the Bank of England (BoE) left its benchmark interest rate at a record low of 0.5% and the size of its asset purchase program unchanged at £375 billion. The Pound rose on Wednesday, after the BoE’s new Deputy Governor, Nemat Shafik, stated that the slack in the UK economy has considerably reduced and hinted that interest rate in the nation may be raised very soon. Also, the NIESR GDP report showed that economic recovery in the nation remained intact in Q1 2014. The pair traded at a high of 1.7170 and a low of 1.7085 in the previous week. GBPUSD is expected to find its first support at 1.7077, with the next at 1.7039. Resistance exists first at 1.7162, and then at 1.7209.
Ahead this week, market participants would keep a tab on consumer price inflation and labor market data in the UK, to gauge the pace of improvement in the nation.
USD JPY
The USD traded 0.74% lower against the JPY over the past week, closing at 101.30. Upbeat domestic data bolstered investors demand for local currency and led JPY to trade higher against the US Dollar. Consumer confidence in Japan improved to its highest level in six months in June. Meanwhile, on an annualized basis, the preliminary machine tool orders surged 34.2% in June. Trade deficit in Japan unexpectedly narrowed to ¥675.9 billion in May from a deficit of ¥780.4 billion recorded in the previous month. Additionally, the nation posted a current account surplus for the fourth consecutive month in May. Japan's economy watchers' assessment of current conditions improved in June, while its index for the future outlook weakened. The pair traded at a high of 102.22 and a low of 101.07. The pair is expected to find its first support at 100.84, with the next support expected at 100.37. The first resistance is at 101.99, and the next at 102.68.
The JPY is expected to take further cues from the BoJ monetary policy statement. Traders would also keep an eye on the Japanese industrial production data and the BoJ monthly economic survey ahead this week.
USD CHF
USD traded 0.21% lower against the CHF and closed at 0.8922 in the last week. In economic news, the Swiss consumer prices remained unchanged year-over-year in June, following the 0.2% rise in May. The Swiss real retail sales fell 0.6% (YoY) in May, missing market expectations for a 1.8% gain and in contrast to a 0.8% rise recorded in the previous month. Moreover, jobless rate in Switzerland remained unchanged in June, in line with market expectations. A separate data revealed that country’s foreign currency reserves climbed to CHF449.6 billion in June from CHF444.4 billion in the previous month. During the period, the pair traded at a high of 0.8961 and a low of 0.8900. The first support is at 0.8894, and the next at 0.8867. Resistance exists first at 0.8955, and then at 0.8989.
Apart from external cues, traders would keep an eye on Swiss economic releases which includes producer and import price data for June and ZEW economic expectations for July.
USD CAD
Last week, the USD traded 0.76% higher against the CAD and closed at 1.0734, as downbeat employment data from Canada weighed on demand for the Loonie. Data revealed that the number of employed people in Canada declined by 9,400 in June, missing market expectations for a 20,000 rise, after an increase of 25,800 in the previous month. Also, unemployment rate in Canada rose to 7.1% in June, from 7.0% in the previous month. Earlier in the week, the Ivey manufacturing PMI unexpectedly fell to a level of 46.9 in June, from a reading of 48.2 in the previous month. Moreover, the Moody’s Investors Service downgraded its outlook on the Canadian banking system, citing concerns over government’s plan to bail out banks in the event of a financial crisis. USDCAD traded at a high of 1.0739 and a low of 1.0627 in the previous week. The first support is at 1.0661, with the next at 1.0588. The first resistance is at 1.0773, while the next is at 1.0812.
Ahead this week, market participants would keep an eye on the Canadian consumer price inflation, manufacturing shipments and wholesale sales data for evaluating the nation’s macro profile.
Moreover, the Bank of Canada’s policy meeting will also remain decisive.
AUD USD
AUD traded 0.29% higher against the USD last week, and closed at 0.9392, following better-than-expected Australian economic data. Construction activity in the nation expanded for the first time in 2014 in June. Business confidence in Australia unexpectedly advanced to a reading of 8.0 in June, while business conditions rose to a level of 2.0 in June, compared to reading of -1.0 recorded in the previous month. Moreover, the Australian consumer sentiment index advanced to a reading of 94.9 in July from a reading of 93.2. A separate data revealed that the number of employed people in Australia increased, rising by 15,900 to 11.58 million in June. However, unemployment rate increased to a seasonally adjusted 6.0% in June from 5.9% in May. During the week, the Aussie came under pressure after data from China, Australia’s biggest trading partner, showed that consumer price inflation eased more-than-expected in June, while trade surplus unexpectedly narrowed. The pair traded at a high of 0.9459 and a low of 0.9340. The first support is at 0.9335, and the next at 0.9278. The first resistance is at 0.9454, and the next at 0.9516.
Moving ahead, the Reserve Bank of Australia’s minutes will remain crucial for the Australian Dollar. Market participants would also keep an eye on leading index data to be released by the Conference Board and the Westpac. Besides, the Chinese retail sales, industrial and GDP data this week will also be key.
Gold
In the prior week, Gold traded 1.28% higher against the USD and closed at 1337.40, amid signs that interest rates in the US will remain on hold for an extended period of time. Gold prices also rose on safe-haven buying after worries about Portugal's Banco Espirito Santo alerted investors of the potential contagion in the European banking sector. However, concerns eased slightly on Friday, after nation’s central bank indicated that it was satisfied that the Banco Espirito Santo would fulfill capital requirements on its own. Additionally, tensions in Israel and unrest in Iraq also supported gold prices. The yellow metal traded at a high of 1346.80 and a low of 1312.10 in the previous week. Gold is expected to find support at 1317.40 and the next at 1297.40. The first resistance is at 1352.10, while the next is at 1366.80.
Moving ahead this week, traders would keep a close tab on the Fed chief, Janet Yellen’s testimony. Additionally, retail sales, consumer sentiment and manufacturing reports, along with the Beige Book survey will be closely scrutinized by investors for further direction on the US economic recovery.
Crude Oil
Oil prices traded 2.83% lower against the USD in the last week and closed at USD100.83, as Libya resumed its oil production and as geopolitical concerns in the Middle East had limited impact on oil supply. Earlier, the Libyan interim Prime Minister, Abdullah Al-Thani acknowledged that authorities had regained control of two export terminals blocked by rebels. Oil traders estimated that opening of ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude oil per day to global energy markets. In its monthly report, the Organization of the Petroleum Exporting Countries (OPEC) reported that rising crude oil supplies from non-OPEC producers would be adequate to meet the expected growth in world oil demand in 2015. On the weekly oil inventory front, the Energy Information Administration reported that the crude stockpiles fell by 2.4 million barrels for the week ended July 4, while the American Petroleum Institute reported that US crude inventories declined 1.7 million barrels. Oil traded at a high of 104.20 and a low of 100.44 in the previous week. Oil has its first major support at 99.45, while the next support exists at 98.06. The first resistance is at 103.21, and the next at 105.58.
Oil prices would take cues from Fed chief, Janet Yellen’s testimony and the barrage of macroeconomic data from the US this week.
Happy trades