U.S. Dollar Trading (USD) traders were waiting with anticipation for the ECB decision last night and were rewarded with some good volatility to trade. The ECB cut rates by 0.25% but the President Draghi was downbeat on the growth outlook for the EU and further operations to help the market. US stocks tanked and the US Dollar was very strong. Looking ahead, June NFP forecast at 90k vs. 69k previously. June Unemployment Rate forecast unchanged at 8.2%.
The Euro (EUR) the break of 1.2500 was sharp with very little support seen under the figure as the EUR/USD slid to 1.2350 by the start of the US session. Consolidation then prevailed but the market is in now looking at the 1.2300 low from last month which has been the cycle low. The NFP tonight may be a saving grace if QE3 expectations from the FED are increased. The Sterling (GBP) the GBP/USD had its own central bank interest rate meeting overnight and the bank did as forecast holding at 0.5% and increased the Asset purchase program to 375bn vs. 325bn previously to help liquidity and lending in the UK banking sector. GBP/USD was supported near the 1.5500 but the fate with be linked with the EUR/USD which is dragging most majors lower. Also ahead, June UK PMI forecast at -0.2% vs. -0.2% previously. May German Industrial Production is forecast at 0.1% vs. 2.2% previously.
The Japanese Yen (JPY) the USD/JPY remained on the sidelines with the action reserved for tonight’s NFP data from the US which is critical for setting the US monetary policy and helping traders choose between the two safe havens. EUR/JPY slid below Y100 and hit Y99 before stabilizing. Australian Dollar (AUD) the AUD/USD held up better than most overnight with EUR/AUD selling to record lows new 1.2000 helping the major to remain supported against the USD. China cut rates and this also helped keep the Asian neighbor currency in demand. The China story is critical for the AUD and will be closely watch in the 2nd half of the year.Looking ahead, May Japanese Leading Indicators previously at -1.3.
Oil & Gold (XAU) Gold rejected Wednesday’s high and fell quickly back to $1600 as the USD soared on EUR/USD selling.OIL/USD was volatile hitting new rally highs to $89 before reversing to $87 with US stocks and USD strength. The recent rally has to work through overbought signals before testing the $90 BRL level.
Pairs to watch
USD/JPY is the pure way to play the US Jobs Data with good up/bad down we are at Key Y80 level
EUR/USD to test 1.2300 or is the market too short going into major US data?
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.2285
1.2360
1.2380
1.2415
1.2460
USD/JPY
78.90
79.45
79.95
80.00
80.25
GBP/USD
1.5470
1.5485
1.5525
1.5570
1.5625
AUD/USD
1.0200
1.0240
1.0260
1.0325
1.0350
XAU/USD
1588.00
1597
1605
1612
1624
OIL/USD
85.00
86.50
86.70
89.00
90.00
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
ECB Disappoints – US NONFARM PAYROLLS TODAY
U.S. Dollar Trading (USD) traders
were waiting with anticipation for the ECB decision last night and were
rewarded with some good volatility to trade. The ECB cut rates by 0.25% but the
President Draghi was downbeat on the growth outlook for the EU and further
operations to help the market. US stocks tanked and the US Dollar was very
strong. Looking ahead, June NFP forecast at 90k vs. 69k previously. June
Unemployment Rate forecast unchanged at 8.2%.
The Euro (EUR) the break of 1.2500
was sharp with very little support seen under the figure as the EUR/USD slid to
1.2350 by the start of the US session. Consolidation then
prevailed but the market is in now looking at the 1.2300 low from last month
which has been the cycle low. The NFP tonight may be a saving grace if QE3 expectations
from the FED are increased. The Sterling (GBP) the GBP/USD had its
own central bank interest rate meeting overnight and the bank did as forecast
holding at 0.5% and increased the Asset purchase program to 375bn vs. 325bn
previously to help liquidity and lending in the UK banking sector. GBP/USD was
supported near the 1.5500 but the fate with be linked with the EUR/USD which is
dragging most majors lower. Also ahead, June UK PMI
forecast at -0.2% vs. -0.2% previously. May German Industrial Production is
forecast at 0.1% vs. 2.2% previously.
The Japanese Yen (JPY) the USD/JPY
remained on the sidelines with the action reserved for tonight’s NFP data from
the US which is critical for setting the US monetary policy and helping traders
choose between the two safe havens. EUR/JPY slid below Y100 and hit Y99 before
stabilizing.
Australian Dollar (AUD) the AUD/USD held up better than
most overnight with EUR/AUD selling to record lows new 1.2000 helping the major
to remain supported against the USD. China cut rates
and this also helped keep the Asian neighbor currency in demand. The China story
is critical for the AUD and will be closely watch in the 2nd half of
the year. Looking ahead, May
Japanese Leading Indicators previously at -1.3.
Oil & Gold (XAU) Gold rejected Wednesday’s
high and fell quickly back to $1600 as the USD soared on EUR/USD selling. OIL/USD was
volatile hitting new rally highs to $89 before reversing to $87 with US stocks
and USD strength. The recent rally has to work through overbought signals
before testing the $90 BRL level.
Pairs to watch
USD/JPY is the pure way to play the US Jobs Data
with good up/bad down we are at Key Y80 level
EUR/USD to test 1.2300 or is the market too short
going into major US data?
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.2285
1.2360
1.2380
1.2415
1.2460
USD/JPY
78.90
79.45
79.95
80.00
80.25
GBP/USD
1.5470
1.5485
1.5525
1.5570
1.5625
AUD/USD
1.0200
1.0240
1.0260
1.0325
1.0350
XAU/USD
1588.00
1597
1605
1612
1624
OIL/USD
85.00
86.50
86.70
89.00
90.00
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
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