Currencies

• The euro (EUR) skyrocketed by 260 pips to 1.2886 before retrace back to 1.2820 yesterday against the US dollar (USD) as the monthly US Retail Sales came out to be worse than expected at -0.2% decrease, while the expectations were at 0.2% increase. The single currency had its biggest gain this year, as investors believe that it might be undervalued. Today the yearly European Final CPI will be announced and is expected to be at 0.3% increase.
• The US dollar (USD) crashed to a five-week low at 105.19 against the Japanese yen (JPY). The greenback is under pressure after the recent bad US data, as the monthly US PPI came out to be worse than expected at -0.1% decrease, while expectations were at 0.1% increase, along with the bad Retail Sales data. Today the US Unemployment Claims, along with the monthly US Industrial Production and the Philly Fed Manufacturing Index will be announced, with expectation at 286K, 0.4% increase and 19.9 respectively.

Equities

• US equities fell to a six-month low as the US Retail Sales were worse than expected. The US 500 (SPI) dropped to 1813, the US 30 (DOW) went to 15767 and The US Tech (NDQ) to 3691. Could this be the end of equities rally?.

Commodities

• WTI Crude (OIL) drop even further at 80.01 USD per barrel as the demand for oil is in its slowest pace in five years and the supplies are rising. The next support is at 78 USD which is a very important level. Today the Crude Oil Inventories will be announced and is expected to be at 2.3 million barrels.

Mover & Shaker with forex options

• Gold (XAU) climbed to a monthly high at 1249 USD as demand for the safe haven boosted, after the recent bad US economy data which signaled that global slowdown may hurt the US recovery.
• Option traders may consider buying a Call on the XAUUSD and gain if the pair moves higher, while the risk is limited to the premium paid.

Written by Demetris Constantinou
Currency Strategist at easy-forex®