Forex Market Update
This morning, the greenback is trading mixed against its key peers, as investors reacted to yesterday’s lackluster macroeconomic data from the US. The weekly initial jobless claims increased in the past week. Meanwhile, the manufacturing activity in the nation rose at a slower pace in current month. The economic activity in Chicago deteriorated in December. Moreover, the existing home sales and the Conference Board’s leading economic index rose at a slower pace in December.
Market participants would now gear up for the US Federal Reserve’s (Fed) policy meeting in the next week, amid rising speculation that the Fed might introduce second policy taper, ignoring the recent disappointing jobs data.
The Euro is trading lower against the USD, amid lack of decisive economic triggers from the Euro bloc. Investors will closely scrutinize a speech by from the European Central Bank’s (ECB) Chief, Mario Draghi, to get cues on the action plan of the central bank to shrug off the low inflationary pressures in the bloc.
The Pound is trading lower, after data released this morning showed a weaker than expected rise in the UK mortgage approvals for December. Yesterday, the Bank of England (BoE) Governor, Mark Carney, at the World Economic Forum stated that he sees no immediate necessity to lift the interest rates, despite robust performance of the UK’s labor market. The Pound traders would now closely eye another speech from the Governor ahead today.
The Aussie experienced a sell-off after the one of the Reserve Bank of Australia’s (RBA) key policymaker, voiced that an exchange rate of 80 US cents might be helpful in supporting the island country.
EUR USD
This morning at 10:40 GMT, the EUR is trading at 1.3671 against the USD, 0.18% lower from the New York close, ahead of the ECB’s Chief, Mario Draghi’s speech scheduled later during the day. In economic news, retail sales in Italy rebounded in December. During the session, the pair traded at a high of 1.3706 and a low of 1.3662. Yesterday, the EUR traded 0.41% higher against the USD in the New York session, and closed at 1.3695, after the consumer confidence in the Euro-zone improved in January.
The pair is expected to find its first support at 1.3629 and first resistance at 1.3710.
GBP USD
At 10:40 GMT, the GBP is trading at 1.6617 against the USD, 0.13% lower from the New York close, ahead of the BoE’s Governor, Mark Carney’s speech scheduled later during the day. On the data front, the BBA mortgage approvals increased at a pace slower-than-expected in December. During the session, the pair traded at a high of 1.6670 and a low of 1.6607. Yesterday, the British Pound traded 0.23% higher versus the Dollar in the New York session, and closed at 1.6638. The BoE Governor, at the World Economic Forum in Davos, echoed the similar views of the central bank’s policy minutes that there is no need to raise the interest in the UK.
The pair is expected to find its first support at 1.6577 and first resistance at 1.6663.
USD JPY
The USD is trading at 102.68 against the JPY at 10:40 GMT this morning, 0.59% lower from the New York close. Yen traders would closely watch the slew of domestic macro economical data to be released during the next week, especially the BoJ’s minutes of its latest policy meeting and the national consumer price index for December. During the session, the pair traded at a high of 103.60 and a low of 102.52. In the New York session yesterday, the USD traded 0.75% lower against the JPY, and closed at 103.28.
The pair is expected to find its first support at 102.01 and first resistance at 103.85.
USD CHF
This morning at 10:40 GMT, the USD is trading at 0.8960 against the Swiss Franc, 0.16% lower from the New York close. Amid a relatively light economic calendar next week, Swiss Franc traders would likely shift their focus to global indicators to get further guidance in the pair. During the session, the pair traded at a high of 0.8993 and a low of 0.8949. In the New York session yesterday, the USD traded 0.68% lower against the CHF, and closed at 0.8974. The CHF found support after the Swiss government approved the Swiss National Bank’s request to hike the reserve requirements of the banks in the nation to check the country’s ballooning housing market.
The pair is expected to find its first support at 0.8926 and first resistance at 0.9017.
USD CAD
At 10:40 GMT, the USD is trading at 1.1072 against the CAD, 0.24% lower from the New York close, ahead of the Canadian inflation data to be released later during the day. During the session, the pair traded at a high of 1.1139 and a low of 1.1053. Yesterday, the USD traded 0.30% lower against the CAD in the New York session, and closed at 1.1099. The Loonie inched higher after the retail sales data in Canada rebounded at a faster pace in November.
The pair is expected to find its first support at 1.1027 and first resistance at 1.1143.
AUD USD
The AUD is trading at 0.8677 against the USD, at 10:40 GMT this morning, 1.04% lower from the New York close, after one of the RBA’s Board Members opined that an exchange rate of around 80 US cents is favorable for the Australian economy. During the session, the pair traded at a high of 0.8777 and a low of 0.8665. AUD traded 0.10% lower against the USD in the New York session, and closed at 0.8768.
The pair is expected to find its first support at 0.8625 and first resistance at 0.8769.
Gold
At 10:40 GMT, Gold is trading at $1260.05 per ounce, 0.35% lower from the New York close, as jitters of a second consecutive policy taper from the US Fed kept investors away from the yellow metal. This morning, Gold traded at a high of $1265.00 and a low of $1256.96 per ounce. In the New York session yesterday, the yellow metal traded 1.23% higher, and closed at $1264.47, as a barrage of disappointing macroeconomic data in the US weighed on the greenback.
Gold has its first support at $1247.59 and first resistance at $1269.51.
Silver
Silver is trading at $19.99 per ounce, 0.19% lower from the New York close, at 10:40 GMT this morning. This morning, Silver traded at a high of $20.12 and a low of $19.95. Silver traded 0.35% lower against the USD in the New York session, and closed at $20.03.
Silver has its first support at $19.85 and first resistance at $20.22.
Crude Oil
At 10:40 GMT, Oil is trading at $96.68 per barrel, 0.70% lower from the New York close. In a key development, the Iranian President at the World Economic Forum pledged to introduce new investment models for oil contracts by September. This morning, Oil traded at a high of $97.80 and a low of $96.61. Yesterday, Oil traded 0.45% higher in the New York session, and closed at $97.40. The Energy Information Administration (EIA) reported that the US crude oil stock piles gained 1.0 million barrels for the week ended January 17.
It has its first support at $96.22 and first resistance at $97.49.
Economic Snapshot
BBA mortgage approvals in UK increased lesser than expectations in December
The BBA mortgage approvals in the UK rose to a level of 46.5K in December, against a market expectation of a level of 47.3K and compared to a reading of 45.4K reported in the previous month.
Retail sales in Italy advanced in November
On a non-seasonally adjusted annual basis, retail sales in Italy rose 0.1% in November, compared to a 1.6% decline recorded in the preceding month. On a seasonally adjusted monthly basis, retail sales in Italy remained flat in November, in line with market expectations and following a 0.1% decrease in the previous month.
Producer price index in Spain rebounded in December
Happy pips.
