Forex Market Update
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.
