FED FOMC Minutes Show Members Split on new Stimulus
U.S. Dollar Trading (USD) the USD was supported by the lack of enthusiasm in the June FOMC minutes for further monetary stimulus only a few members looking to expand the QE. The market is expecting the FED to do more to help the US economy in the medium term but it may be through new tools that are less controversial than the previous bond buying program. Looking ahead, Weekly Jobless Claims forecast at 372k vs. 374k previously.
The Euro (EUR) the EUR/USD hit fresh lows once again overnight with bounces proving very short-lived and the pair hit new 1.2210 lows. The downtrend is firmly in place but the market is heavily short and it would not take much to spark a short covering rally. The lack of QE3 in the FOMC minutes is not helping the USD side of the EUR/USD equation however. The Sterling (GBP) the GBP/USD reversed a rally from 1.5570 to 1.5500 after the FOMC minutes threw cold water on QE3 hopes. The lack of EUR/USD support is weighing on the GBP which had been developing some bullish feel in the previous few weeks. A break of 1.5450 would put 1.5000 back into the radar and encourage further attempts lower. Looking ahead, May Industrial Production forecast at 0.0% vs. -0.8% previously. Also ECB President Draghi speaks today.
The Japanese Yen (JPY) the BOJ has held rates at 0.1% today but they did offer the market some fine tuning of their monetary policy by increasing short term asset buying at the expense of the longer term operations. The USD/JPY shot immediately toward Y80 but sellers were aggressive at the level and we went back to the new lows under Y79.50. Australian Dollar (AUD) The AUD/USD was another currency in play during the Asian session as June Employment dropped -27k unexpectedly vs. 0k forecast. The Unemployment rate also increased to 5.2% and the AUD/USD was crushed lower under 1.0200 to 1.0180 after opening at 1.0260. Looking ahead, Friday the big risk event of the weak is the Chinese GDP which is expected to show a significant slowdown and is concerning Asian investors.
Oil & Gold (XAU) consolidated the big fall from $1600 able to rally briefly bounce above $1580 but is looking heavy and sentiment is turning against the precious metal. OIL/USD was stronger bucking the trend of other assets with the recent sell off overdone and buyers emerging under $85.
Pairs to watch
AUD/USD is the China slowdown going to hurt the AUD?
EUR/AUD can the heavily sold cross rebound from record lows?
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.2150
1.2210
1.2240
1.2365
1.2400
USD/JPY
78.90
79.20
79.50
80.00
80.25
GBP/USD
1.5425
1.5450
1.5510
1.5550
1.5605
AUD/USD
1.0085
1.0150
1.0180
1.0240
1.0325
XAU/USD
1557.00
1564
1570
1598
1604
OIL/USD
82.50
84.00
85.50
86.00
88.00
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
FED FOMC Minutes Show Members Split on new Stimulus
U.S. Dollar Trading (USD) the USD
was supported by the lack of enthusiasm in the June FOMC minutes for further monetary
stimulus only a few members looking to expand the QE. The market is expecting
the FED to do more to help the US economy in the medium term but it may be
through new tools that are less controversial than the previous bond buying
program. Looking ahead, Weekly
Jobless Claims forecast at 372k vs. 374k previously.
The Euro (EUR) the EUR/USD hit
fresh lows once again overnight with bounces proving very short-lived and the
pair hit new 1.2210 lows. The downtrend is firmly in place but the market is
heavily short and it would not take much to spark a short covering rally. The
lack of QE3 in the FOMC minutes is not helping the USD side of the EUR/USD equation
however. The Sterling (GBP) the
GBP/USD reversed a rally from 1.5570 to 1.5500 after the FOMC minutes threw
cold water on QE3 hopes. The lack of EUR/USD support is weighing on the GBP
which had been developing some bullish feel in the previous few weeks. A break
of 1.5450 would put 1.5000 back into the radar and encourage further attempts
lower. Looking ahead, May
Industrial Production forecast at 0.0% vs. -0.8% previously. Also ECB President
Draghi speaks today.
The Japanese Yen (JPY) the BOJ has held
rates at 0.1% today
but they did offer the market some fine tuning of their monetary policy by
increasing short term asset buying at the expense of the longer term
operations. The USD/JPY shot immediately toward Y80 but sellers were aggressive
at the level and we went back to the new lows under Y79.50. Australian Dollar (AUD) The
AUD/USD was another currency in play during the Asian session as June
Employment dropped -27k unexpectedly vs. 0k forecast. The Unemployment rate
also increased to 5.2% and the AUD/USD was crushed lower under 1.0200 to 1.0180
after opening at 1.0260. Looking ahead, Friday the big risk event of the weak is the Chinese GDP
which is expected to show a significant slowdown and is concerning Asian investors.
Oil & Gold (XAU) consolidated the
big fall from $1600 able to rally briefly bounce above $1580 but is looking
heavy and sentiment is turning against the precious metal. OIL/USD was stronger
bucking the trend of other assets with the recent sell off overdone and buyers
emerging under $85.
Pairs to watch
AUD/USD is the China slowdown going to hurt the AUD?
EUR/AUD can the heavily sold cross rebound from
record lows?
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.2150
1.2210
1.2240
1.2365
1.2400
USD/JPY
78.90
79.20
79.50
80.00
80.25
GBP/USD
1.5425
1.5450
1.5510
1.5550
1.5605
AUD/USD
1.0085
1.0150
1.0180
1.0240
1.0325
XAU/USD
1557.00
1564
1570
1598
1604
OIL/USD
82.50
84.00
85.50
86.00
88.00
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
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