Eur/usd - page 427
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Post-FOMC: What's Next For EUR/USD & FX Market? The Fed flies under the radar in April. The April FOMC statement was broadly in line with expectations. The headline grabbing line was that the FOMC no longer called out the risks posed by "global economic and financial developments", but upon closer inspection, the Fed simply said it will now "closely monitor" those developments. This revision likely reflects the recent improvement in financial conditions, much of which we would attribute to Fed policy. "Policy relief" narrative remains intact…
Consistent with the view that trade-weighted dollar has peaked.In FX, we have been arguing that the dollar has peaked against DM currencies, the euro in particular, and we remain bullish EUR/USD. Fair value models indicate the euro is still cheap, and with Euro area and US growth continuing to re-synchronize, we forecast a grind higher to our year-end target of 1.16.
Our view that the dollar has peaked does not extend to EM currencies, where our EM strategists remain bearish. Although a dovish Fed can delay EM currency depreciation, they don’t think it can prevent it entirely. In commodity currencies, we remain bullish CAD and NOK, but bearish AUD.
Cautious risk-on tone remains, but stay short EM FX as a hedge to long equities. As we argued recently, as long as global policy remains accommodative, the risk is skewed towards: 1) stronger equity markets; 2) laggards – such as European equities and credits – catching up; 3) steeper curves with higher bond yields, particularly in Europe; 4) a flatter path for the dollar which; 5) helps commodities stabilize; 6) higher gold prices driven by easier policy; combined with 7) a recovery in inflation expectations; and, lastly 8) weaker currencies (vs. USD and EUR) in countries where policy easing is urgently required (Japan, NJA, etc.) or EMs with balance sheet pressures,
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Yesterday EURUSD went back and forward but closed in the green although closed in the middle of the daily range, in addition closed within previous day range, suggesting lack of momentum, neither bulls nor bears are showing control.
The pair is trading above the 10, 50 and the 200-day moving averages that should act as a dynamic support.
The key levels to watch are: A daily resistance at 1.1459, the previous swing high at 1.1398 (resistance), the 10-day moving average at 1.1293 (support), a daily support at 1.1237 and the 50-day moving average at 1.1238 (Support).
Germany unemployment change April -16k vs 0k exp Latest German jobs data now out 28 April
The euro added value against the dollar for a third consecutive session on Wednesday, climbed 26 pips to a closing price of 1.1320. The movement noted high of the beginning of the week at 1.1360, while the bottom has been reached at level of 1.1271. Index relative strength added positions supporting the bulls, but the major challenge remains upwards at 1.1340/60.
EUR/USD is trading higher today going to 1.1367 and is now trading at 1.1347. Market sentiment remains bearish as volume is not enough to keep bulls satisfied with current gains. Price drop could be expected that would lead the price to 1.12.
German Shoppers in Murky Mood in March Retail sales in Europe's powerhouse posted worse-than-expected results in the third month of 2016, according to the latest report from the German statistical office (Destatis) released on Friday.
Retail turnover fell 1.1% in real terms month-on-month in March, down from the 0.3% decrease recorded in the previous month, and far below market expectations of 0.4% growth.
Measured on an annual basis, the gauge advanced 0.7% in the reported period, following an increase of 5.5% in the preceding month, while analysts had projected a pick-up of 2.7%.
Compared with the previous year, turnover in retail trade was in the first three months 2016 in real terms 1.5% and in nominal terms 1.6% larger than in in the corresponding period of the previous year.
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EUR/USD: Pair Conquers $1.14 on Greenback Demise Traders sold the US dollar on Friday as well and the pair was grinding higher, spotted at daily highs during the Frankfurt session, 0.53% stronger and breaking the $1.14 mark.
There are several US macro data on the agenda today, including personal spending and income data for March, along with the employment cost index and the PCE price index. These will be important as they might offer some insight into inflation readings later in the quarter.
Moreover, the consumer confidence gauge and the Chicago PMI will be released, both for April. The former is expected to improve marginally, while the latter should slightly decline.
In the previous session, according to the first estimate by the Bureau of Economic Analysis, the US GDP for the first quarter decelerated to 0.5%, well down from the 1.4% booked in the fourth quarter of 2015.
The reaction was very mild and the US dollar continued to trade weaker against the euro, with the negative trend for the greenback still intact and the pair found further buyers on Friday as well.
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Yesterday EURUSD initially fell but found enough support at the 10-day moving average to turn around and close near the high of the day, however closed within previous day range, suggests a slight momentum on the bullish side of neutral.
The pair is trading above the 10, 50 and the 200-day moving averages that should act as a dynamic support.
The key levels to watch are: A daily resistance at 1.1556, other daily resistance at 1.1459, the previous swing high at 1.1398 (resistance), the 10-day moving average at 1.1294 (support), the 50-day moving average at 1.1238 (Support) and a daily support at 1.1237.
Euro Zone's Economic Growth Quickens in Q1: GDP Economic growth in the euro zone was better in the first quarter than in the quarter before, Eurostat said in a fresh report on Friday, with the latest reading coming in above projections.
The GDP growth was 0.6% in the first three months of this year, compared to the expansion of 0.3% booked in the final quarter last year. The market had bet on a 0.4% growth.
On the yearly basis, euro zone's economic activity expanded 1.6% in the first quarter, the same as in the quarter to December, while analysts had forecast a rise of 1.4%.
When asked at the press conference by WBP Online about the euro zone's growth, European Central Bank President Mario Draghi said that growth continues to be moderate but steady, mostly supported by consumption and now investment, and it is dampened by external components.
"Our monetary policy measures have been supporting growth, and I should say with rare exceptions our monetary policy has been the only policy in the last four years to support growth," Draghi said.
Meanwhile, the latest report showed that the euro area's business climate improved less than expected in April as the European Commission's Business Climate Index rose to 0.13 points, slightly less than forecasts of 0.14, but better than an upwardly revised 0.12 points in March.
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EUR/USD rose to 1.1459 in today's trading session and is currently trading at 1.1453. First bull target is seen at 1.1560, while first support could be found at 1.1370.