Forex Market Update
This morning, the greenback is trading mostly lower against most of the major currencies, ahead of the US GDP numbers and the Fed’s decision on the US monetary policy.
The EUR is trading higher against the USD benefited from upbeat German employment data. However, the gains in the shared currency were capped after Euro-zone’s inflation rate disappointed market expectations for April and after the ECB’s Christian Noyer highlighted his preference for additional stimulus measures to boost economic recovery in the region.
Earlier in Japan, the BoJ refrained from altering its monetary policy at its April meeting while projecting the nation to achieve its 2.0% inflation around the middle of the projection period. However, the BoJ Governor, Haruhiko Kuroda, disclosed that three policymaker were not in favor of the central bank’s upbeat view on inflation.
Late Yesterday, the BOE Governor, expressed optimistic view on the UK economy by stating that economic recovery is starting to broaden and is showing early signs of sustainability. Also, separately, BoE’s Ian McCafferty opined that the “chances of a fully sustained recovery” in the UK economy were at the “highest” while suggesting that the BoE should not wait till the UK economy starts operating at full capacity for raising its interest rate.
In a noteworthy event, Moody’s rating agency upgraded its view on Greek banks to “Stable” from “Negative.”
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3825 against the USD, 0.09% higher from the New York close. On the economic front, consumer inflation rate in the Euro-zone economy rose in April but still missed economists' predictions. However, the number of unemployed people in Germany fell for the fifth month in April while unemployment rate came in unchanged at previous month’s level of 6.7% in this month. During the session, the pair traded at a high of 1.3834 and a low of 1.3797. Yesterday, the EUR traded 0.12% lower against the USD in the New York session, and closed at 1.3812.
The pair is expected to find its first support at 1.3774 and first resistance at 1.3873.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6816 against the USD, marginally lower from the New York close. Data released overnight showed that Gfk consumer confidence in the UK economy improved further in March and reached its highest level since June 2007. During the session, the pair traded at a high of 1.6830 and a low of 1.6812. Yesterday, the British Pound traded marginally lower versus the Dollar in the New York session, and closed at 1.6824. Late Tuesday, the BoE Governor, Mark Carney, opined that the broadening economic recovery in Britain is showing early signs of sustainability.
The pair is expected to find its first support at 1.6795 and first resistance at 1.6843.
USD JPY
The USD is trading at 102.54 against the JPY at 9:40 GMT this morning, 0.09% lower from the New York close. Earlier today, the BoJ kept its monetary policy intact and, in its semi-annual report, projected inflation rate to accelerate and stay at 2% for at least two years from the middle of 2015. However, the BoJ Governor, Kuroda disclosed that three policymaker dissented to the central bank’s view on the inflation growth. During the session, the pair traded at a high of 102.67 and a low of 102.34. In the New York session yesterday, the USD traded 0.08% lower against the JPY, and closed at 102.63.
The pair is expected to find its first support at 102.28 and first resistance at 102.80.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8821 against the Swiss Franc, 0.16% lower from the New York close. In economic news, the UBS consumption indicator in Switzerland rose to a reading of 1.84 in March while the KOF leading indicator declined for the second consecutive month to its lowest reading since June 2013 in April. During the session, the pair traded at a high of 0.8852 and a low of 0.8823. In the New York session yesterday, the USD traded 0.11% higher against the CHF, and closed at 0.8835.
The pair is expected to find its first support at 0.8793 and first resistance at 0.8851.
USD CAD
At 9:40 GMT, the USD is trading at 1.0962 against the CAD, 0.13% higher from the New York close, ahead of Canada’s February GDP data. During the session, the pair traded at a high of 1.0966 and a low of 1.0948. Yesterday, the USD traded 0.25% lower against the CAD in the New York session, and closed at 1.0948. Late Tuesday, the BoC Governor, Stephen Poloz, projected the recent weakness in Canada’s export sector to continue for years.
The pair is expected to find its first support at 1.0938 and first resistance at 1.0989.
AUD USD
The AUD is trading at 0.9274 against the USD, at 9:40 GMT this morning, 0.12% higher from the New York close. Early morning, the RBA reported that, on a monthly basis, total credit to Australia’s private sector continued to grow at a steady pace of 0.4% in March. During the session, the pair traded at a high of 0.9298 and a low of 0.9266. AUD traded tad lower against the USD in the New York session, and closed at 0.9263.
The pair is expected to find its first support at 0.9255 and first resistance at 0.9296.
Gold
At 9:40 GMT, Gold is trading at $1292.00 per ounce, 0.29% lower from the New York close, as traders await the US Fed’s decision on its monetary policy. This morning, Gold traded at a high of $1296.80 and a low of $1289.40 per ounce. In the New York session yesterday, the yellow metal traded marginally lower, and closed at $1295.70, as a rally in the world equity markets dimmed the safe-haven appeal of the metal.
Gold has its first support at $1286.33 and first resistance at $1299.83.
Silver
Silver is trading at $19.41 per ounce, 0.41% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $19.51 and a low of $19.34. Silver traded 0.10% higher against the USD in the New York session, and closed at $19.49. However, a leading research firm projected a 14% drop in silver prices in 2014 due to rising supply and weaker investment demand for the commodity.
Silver has its first support at $19.31 and first resistance at $19.54.
Crude Oil
At 9:40 GMT, Oil is trading at $100.31 per barrel, 0.40% lower from the New York close, ahead of a government weekly report on the US crude stockpiles. This morning, Oil traded at a high of $100.72 and a low of $100.10. Yesterday, Oil traded 0.56% lower in the New York session, and closed at $100.70. However, fresh violent outburst in Ukraine and Libya underpinned the losses in the commodity. Meanwhile, the API reported a 3.0 million barrels rise in the US crude supplies last week.
It has its first support at $99.54 and first resistance at $101.64.
Economic Snapshot
Euro-zone consumer price index rose less than market estimate in April
On an annual basis, the preliminary consumer price index in the Euro-zone rose 0.7% in April, compared to a 0.5% rise recorded in the month. Markets were expecting the consumer price index to rise 0.8% in April.
German retail sales dropped unexpectedly in March
On an annual basis, retail sales in Germany dropped 1.9% in March, following a revised increase of 1.9% recorded in the preceding month. Markets were expecting retail sales to rise 1.6% in March.
Germany unemployment rate remained steady in April
On a seasonally adjusted basis, unemployment rate in Germany remained unchanged at 6.7% in April compared to the previous month, in line with market expectations. Meanwhile, the number of people unemployed in Germany dropped by 25.0K in April, compared to a revised drop of 14.0K reported in the previous month.
Italy preliminary consumer price index rose more than market estimate in April
On an annual basis, the preliminary consumer price index in Italy rose 0.6% in April, compared to a 0.4% rise recorded in the previous month. Markets were expecting the preliminary consumer price index to rise 0.5% in April.
Spain GDP rose in line with market consensus in Q1 2014
On a quarterly basis, the preliminary gross domestic product (GDP) in Spain rose 0.4% in the Q1 2014, in line with market estimates and compared to a rise of 0.2% recorded in the Q4 2013.
Switzerland UBS consumption indicator rose in March
The UBS consumption indicator in Switzerland climbed to 1.84 in March, compared to a revised reading of 1.52 in the previous month.
BoJ kept its key interest rate and monetary policy unchanged
The Bank of Japan (BoJ) in its latest monetary policy statement stated that it has held its key interest rate steady at 0.10% and has maintained its ultra-loose monetary policy.
BoJ maintained its inflation outlook, while lowered growth forecast for the fiscal 2014
The Bank of Japan (BoJ), in its latest semi-annual outlook report on prices and growth, indicated that the nation remains on track to achieve its 2% inflation target in 2015. However, the central bank downgraded its FY2014 growth estimate to 1.1% from 1.4% reported in January 2014.
Good trades.
