U.S. Dollar Trading (USD) stronger than expected July Retail Sales at 0.8% vs. 0.3% forecast helped the USD rally after analysts questioned whether QE3 will be implemented this year. Bigger than expected increases in the July Producer Price Index (PPI) 0.3% vs. 0.2% forecast will make today’s Consumer Price Index (CPI) numbers even more important. Looking ahead, July CPI is forecast at 0.2% vs. 0.0% previously m/m. August NY FED is forecast at 6.5 vs. 7.39 previously.
The Euro (EUR) some better than expected German Q2 GDP figures helped the Euro hit day highs above 1.2380 but this was short lived as the major fell back to lower 1.2300 region after the strong US data. Some negative headlines emerged later regarding Greece asking for an extension of the Austerity deadline by two years. Germany has recently stated it will not renegotiate bailout terms with Greece and it is becoming more politically difficult for German politicians to be lenient. The Sterling (GBP) the GBP/USD remained close to the 1.5700 level but could not push above the level once again with USD strength in the US session. GBP/JPY is supporting the major with a nice move higher yesterday on the back of the USD/JPY. Looking ahead, August MPC Vote forecast at 0-9-0. Also July UK Claimant count forecast at 6k vs. 6.1k previously.
The Japanese Yen (JPY) the stronger than forecast US data helped the USD/JPY break above resistance at Y78.70 to hit multi week highs just under Y79. The market is still requiring the Bulls to prove themselves after many failed rallies with most traders still looking to range trade the pair while the Y78-80 range holds. The Yen crosses are mixed with the EUR/JPY still near historic lows so any reversal could be quite dramatic. Australian Dollar (AUD) the AUD/USD is struggling this week breaking down below 1.0500 supports overnight as profit takers took control. The uptrend is still in play and it is healthy to have the market correct lower but as is always the case reversals and downtrends begin with corrections. Support is seen at 1.0450-1.0380 area and the 200DMA is still significantly further away at 1.0300. EUR/AUD and GBP/AUD are both surging higher and threatening to break uptrends.Update August Australian Consumer Sentiment at -2.5% vs. 3.7% previously.
Oil & Gold (XAU) XAU/USD fell for a second day on the QE3 questioning after the strong US retail data. OIL/USD was steady at $93 with the strong US data not a negative for the energy commodity.
Pairs to watch
EUR/JPY safer way to express Eurozone Optimism?
USD/JPY Technically break higher but dangerous to get excited?
US Retail Sales Questions Need for QE3
U.S. Dollar Trading (USD) stronger
than expected July Retail Sales at 0.8% vs. 0.3% forecast helped the USD rally
after analysts questioned whether QE3 will be implemented this year. Bigger
than expected increases in the July Producer Price Index (PPI) 0.3% vs. 0.2%
forecast will make today’s Consumer Price Index (CPI) numbers even more
important. Looking
ahead, July CPI is forecast at 0.2% vs. 0.0% previously
m/m. August NY FED is forecast at 6.5 vs. 7.39 previously.
The Euro (EUR) some better than
expected German Q2 GDP figures helped the Euro hit day highs above 1.2380 but
this was short lived as the major fell back to lower 1.2300 region after the
strong US data. Some negative headlines emerged later regarding Greece asking
for an extension of the Austerity deadline by two years. Germany has recently
stated it will not renegotiate bailout terms with Greece and it is becoming
more politically difficult for German politicians to be lenient. The Sterling (GBP) the
GBP/USD remained close to the 1.5700 level but could not push above the level
once again with USD strength in the US session. GBP/JPY is supporting the major
with a nice move higher yesterday on the back of the USD/JPY. Looking ahead, August
MPC Vote forecast at 0-9-0. Also July UK Claimant count forecast at 6k vs. 6.1k
previously.
The Japanese Yen (JPY) the stronger than
forecast US data helped the USD/JPY break above resistance at Y78.70 to hit
multi week highs just under Y79. The market is still requiring the Bulls to
prove themselves after many failed rallies with most traders still looking to
range trade the pair while the Y78-80 range holds. The Yen crosses are mixed
with the EUR/JPY still near historic lows so any reversal could be quite
dramatic. Australian Dollar
(AUD) the AUD/USD is struggling this week breaking down
below 1.0500 supports overnight as profit takers took control. The uptrend is
still in play and it is healthy to have the market correct lower but as is
always the case reversals and downtrends begin with corrections. Support is
seen at 1.0450-1.0380 area and the 200DMA is still significantly further away
at 1.0300. EUR/AUD and GBP/AUD are both surging higher and threatening to break
uptrends. Update
August Australian Consumer Sentiment at -2.5% vs. 3.7% previously.
Oil & Gold (XAU) XAU/USD fell
for a second day on the QE3 questioning after the strong US retail data. OIL/USD was steady at $93
with the strong US data not a negative for the energy commodity.
Pairs to watch
EUR/JPY safer way to express Eurozone Optimism?
USD/JPY Technically break higher but dangerous to
get excited?
TECHNICAL COMMENTARY
Currency
Sup 2
Sup 1
Spot
Res 1
Res 2
EUR/USD
1.2215
1.2250
1.2325
1.2380
1.2460
USD/JPY
78.16
78.48
78.80
79.05
79.17
GBP/USD
1.5578
1.5657
1.5670
1.5730
1.5750
AUD/USD
1.0384
1.0432
1.0475
1.0578
1.0600
XAU/USD
1584.00
1590
1601
1608
1618
OIL/USD
90.60
91.75
93.10
94.00
94.60
By Anthony Darvall (TonyD)
Forex trading involves substantial risk of loss, and may not be suitable for everyone.
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