Forex Market Update
This morning, the greenback is trading lower against most of the major currencies.
The EUR is trading higher against the USD, benefited from a better-than-expected Euro-zone retail sales and German factory orders data for April. Looking forward, traders keenly await ECB’s June policy decision.
The GBP is trading higher ahead of the BoE’s interest rate and asset-purchase decision. Yesterday, a BoE official, Richard Sharp hinted that recovery in the domestic economy still remains fragile in nature, despite the latest batch of UK economic releases showing otherwise.
In Japan, BoJ’s Takehiro Sato opined that the BoJ should opt for a flexible policy approach in its path towards price stability, in order to “achieve a sustainable growth.” He further added that Japan-like disinflationary trend might now stay for a prolonged period of time in the Euro-zone.
Yesterday, the greenback traded higher against major counterparts in the New York session, following strong economic releases from the US service sector and after the Fed Beige book noted that all of the US 12 regions grew at a “modest to moderate” pace. However, another report showed that job creation in the US private sector slowed in May.
The CAD lost ground as the BoC kept its interest rate unchanged at 1.0% and highlighted the need for a weaker Loonie to boost Canada’s exports.
EUR USD
This morning at 9:40 GMT, the EUR is trading at 1.3613 against the USD, 0.10% higher from the New York close, with focus on the ECB’s interest rate decision. On the economic front, retail sales in the Euro-zone registered their strongest annual growth in seven years in April while German factory orders rebounded on a month-on-month basis. During the session, the pair traded at a high of 1.3618 and a low of 1.3597. Yesterday, the EUR traded 0.21% lower against the USD in the New York session, and closed at 1.3600.
The pair is expected to find its first support at 1.3591 and first resistance at 1.3638.
GBP USD
At 9:40 GMT, the GBP is trading at 1.6769 against the USD, 0.19% higher from the New York close, ahead of BoE’s policy decision. In other economic news, UK Halifax house prices rose at the fastest month-on-month pace since October 2002 in April. During the session, the pair traded at a high of 1.6770 and a low of 1.6737. Yesterday, the British Pound traded 0.16% lower versus the Dollar in the New York session, and closed at 1.6737. A BoE policymaker, Richard Sharp, indicated that, despite the recent upbeat economic releases from the UK economy, the economy still remains in a fragile position.
The pair is expected to find its first support at 1.6742 and first resistance at 1.6783.
USD JPY
The USD is trading at 102.48 against the JPY at 9:40 GMT this morning, 0.23% lower from the New York close. Earlier today, BoJ’s Takehiro Sato urged the central bank to opt for a flexible monetary-policy approach in order to attain price stability while warning that the Euro-zone economy might possibly slip into Japan-like deflationary trap. During the session, the pair traded at a high of 102.74 and a low of 102.49. In the New York session yesterday, the USD traded 0.22% higher against the JPY, and closed at 102.72.
The pair is expected to find its first support at 102.35 and first resistance at 102.70.
USD CHF
This morning at 9:40 GMT, the USD is trading at 0.8958 against the Swiss Franc, 0.16% lower from the New York close. Traders are expected to keep a close tab on global economic news for further cues in the currency pair, amid lack of economic releases from the Swiss economy. During the session, the pair traded at a high of 0.8979 and a low of 0.8956. In the New York session yesterday, the USD traded 0.17% higher against the CHF, and closed at 0.8972.
The pair is expected to find its first support at 0.8945 and first resistance at 0.8975.
USD CAD
At 9:40 GMT, the USD is trading at 1.0935 against the CAD, 0.06% lower from the New York close. Traders keenly await Canada’s building permits and Ivey PMI data for additional cues in the loonie. During the session, the pair traded at a high of 1.0958 and a low of 1.0937. Yesterday, the USD traded 0.16% higher against the CAD in the New York session, and closed at 1.0942, as the latter declined after the BoC kept its interest rate unchanged at 1.0% while expressing concerns on Canada’s economic growth-outlook.
The pair is expected to find its first support at 1.0913 and first resistance at 1.0957.
AUD USD
The AUD is trading at 0.9287 against the USD, at 9:40 GMT this morning, 0.11% higher from the New York close. Data released overnight showed that Australia unexpectedly posted its first monthly trade deficit since November 2013 in April as imports of capital and consumer goods rose sharply. During the session, the pair traded at a high of 0.9291 and a low of 0.9265. AUD traded marginally lower against the USD in the New York session, and closed at 0.9277.
The pair is expected to find its first support at 0.9266 and first resistance at 0.9300.
Gold
At 9:40 GMT, Gold is trading at $1244.30 per ounce, a tad lower from the New York close, as traders keenly await ECB’s policy decision for further guidance in gold prices. This morning, Gold traded at a high of $1245.20 and a low of $1241.70 per ounce. In the New York session yesterday, the yellow metal traded 0.21% lower, and closed at $1244.40, amid broad gains in the US Dollar. However, holdings in the SPDR Gold Trust rose by 1.8 tons to 787.08 tons on Tuesday.
Gold has its first support at $1240.83 and first resistance at $1248.63.
Silver
Silver is trading at $18.77 per ounce, 0.16% lower from the New York close, at 9:40 GMT this morning. This morning, Silver traded at a high of $18.83 and a low of $18.73. Silver traded 0.19% lower against the USD in the New York session, and closed at $18.80, hurt by a stronger US Dollar and amid soft demand for industrial metals.
Silver has its first support at $18.70 and first resistance at $18.86.
Crude Oil
At 9:40 GMT, Oil is trading at $102.25 per barrel, 0.20% lower from the New York close. This morning, Oil traded at a high of $102.47 and a low of $102.12. Yesterday, Oil traded 0.76% lower in the New York session, and closed at $102.42, as easing tensions in Ukraine bolstered supply-outlook of the commodity. However, EIA’s weekly report, indicating a 3.4 million barrels fall in the US crude supplies, kept the commodity’s losses in check.
It has its first support at $101.68 and first resistance at $103.25.
Economic Snapshot
UK Halifax house prices rose more than expected in May
The Halifax house price index in the UK rose 3.9% in May, following a revised decrease of 0.3% recorded in the preceding month. Markets were expecting Halifax house price index to rise 0.7% in May.
Euro-zone retail sales rose unexpectedly in April
On a monthly basis, seasonally adjusted retail sales in the Euro-zone rose 0.4% in April, compared to a revised 0.1% rise recorded in the previous month. Markets were expecting retail sales to remain steady in April.
German factory orders rebounded more than expected in April
On a seasonally adjusted monthly basis, factory orders in Germany climbed 3.1% in April, compared to a 2.8% decline in the previous month. Markets were expecting factory orders to rise 1.4% in April.
France unemployment rate remained unexpectedly steady in the Q1 2014
The ILO unemployment rate in France remained unchanged at 10.1% in Q1 2014, compared to a revised similar rate recorded in the previous quarter. Markets were expecting the ILO unemployment rate to rise to 10.3% in Q1 2014.
Japan economy likely to continue with moderate recovery trend, indicated BoJ’s Sato
A Bank of Japan (BoJ) board member, Takehiro Sato, opined that Japan’s moderate economic recovery is likely to resume from summer, supported by a gradual recovery in the nation’s exports. Sato further indicated that the central bank must conduct its monetary policy in a flexible manner, keeping a close watch on developments in the nation’s economic growth and inflation. Sato also stated that the disinflationary trend in the Euro-zone might be prolonged, primarily in the peripheral nations.
Australia’s trade balance unexpectedly swung to a deficit in April
Australia’s seasonally adjusted trade balance unexpectedly swung to a deficit of A$122.0 million in April, compared to a revised surplus of A$902.0 million recorded in the previous month. Markets had expected a trade surplus of A$510.0 million in April.
China Markit services sector activity declined in May
According to Markit Economics, the services Purchasing Managers’ Index (PMI) in China fell to a level of 50.7 in May from a level of 51.4 reported in the previous month.
Good trades.
