FOREXYARD: Forex News Blog | |
- Euro and Sterling Bounce Back
- EUR/SEK – Triangle Consolidation Pattern
- US Housing Prices at Low Point; Rental Prices Soaring
- Aussie Retail Sales Up; Trade Surplus Muted
- ADP Employment Change Reveals Sluggish Job Growth
- Swiss Franc Boosted by Retail Sales Data; Risk Aversion
- Safe Haven Rally into Friday’s Jobs Report
| Posted: 02 Jun 2011 05:01 AM PDT
The dollar was down across the board as the greenback gave back most of its late day gains from yesterday. The euro recovered its losses and then some versus the dollar after yesterday's rating downgrade of Greece by Moody's. Helping to bring the euro off of its lows today were comments made by ECB President Trichet who spoke of further fiscal intervention in the euro zone and a decent Spanish bond auction. Liquidity was noticeably tighter with public holidays in France and Germany which may have helped ease the euro off of its lows. The jump in the EUR/USD this morning moved the pair above the 50% retracement level from the May decline at 1.4450. The next test will come at 1.4570 from the 61.8% retracement. To the downside the 1.4350 level may prove to be supportive. Sterling came off of its low for the day after better than expected construction PMI numbers. The GBP/USD failed to move below support at 1.6300 and climbed as high as 1.6416. The pound could continue to move higher but the real test of sterling's momentum will come at the 1.6515-50 resistance zone. The yen is stronger versus the dollar after Japanese Prime Minister Kan avoided defeat in a vote of no confidence. However, sources say he will chose not to fulfill his entire term in office. The 80.60 support level has held this week but a breach here would allow the USD/JPY to decline to the next support at 80.35. Resistance is found at 81.75 and at 82.20. After yesterday's sharp drop in US equities the early price action from this morning should not be confused with the "risk-on" nomenclature. The Nikkei is down- 1.70% while the London FTSE is lower by -0.75%. Crude oil is marginally higher as the commodity treads water just above $100 a barrel. US data releases this week have done little to support the greenback as highlighted by yesterday's weak ADP job numbers and the recent trend of weak US economic data feeding into USD buying is beginning show cracks. Economists have begun lowering their forecasts' for Friday's NFP jobs report. Storm clouds are beginning to form over the head of the US economy given the Fed's QEII program is due to end next month and little has been proposed on the policy front to address the recent US slowdown. The payrolls report tomorrow may intensify the negative sentiment. Read more forex trading news on our forex blog. |
| EUR/SEK – Triangle Consolidation Pattern Posted: 02 Jun 2011 02:07 AM PDT
The EUR/SEK is consolidating in a triangle chart pattern. Based on the long term trend of the pair the next move may be to the downside. From February to early April the euro came off of its lows versus the Swedish krona only to consolidate its gains in a defined triangle chart pattern. Moving to the weekly chart it is apparent that the long term trend of the pair is to the downside. Therefore, traders may see the EUR/SEK to break below the rising lower boundary of the triangle pattern which comes in today at 8.8750. Initial resistance is found at the mid-March and April lows at 8.8550, followed by 8.7875, and finally at the March low at 8.700. However, should the EUR/SEK break out higher from the consolidation pattern resistance would be found at the May high of 9.0730 and the April high of 9.1220. Read more forex trading news on our forex blog.
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| US Housing Prices at Low Point; Rental Prices Soaring Posted: 01 Jun 2011 11:52 PM PDT
Analyses viewing the housing sector of the US economy have recently begun to factor in rental prices as a gauge of inflation. The move away from buying houses as an investment has sunk the value of homes across the country, but rental prices have taken off as a byproduct of this shift in housing behavior. The Federal Reserve's policy of maintaining low interest rates through to mid-2012 is partially considered using housing data as a prime element of consumer spending, inflation and sentiment towards investing. But rental prices are only one aspect of home values and their soaring increase, in some areas almost doubling, are beginning to take a toll on consumers. If the issue is pushed further, movement may be seen on interest rates sooner than expected; but so far, analysts aren't holding their breath. Read more forex trading news on our forex blog. |
| Aussie Retail Sales Up; Trade Surplus Muted Posted: 01 Jun 2011 11:46 PM PDT
The Australian economy posted solid gains in retail sales this morning concurrent with a report which showed the nation's trade balance falling short of expectations. With yesterday's shrinkage in the Australian GDP, traders have finally begun to weigh in on the Australian dollar's (AUD) value. Though the Aussie was able to withstand sell pressure early in the day Wednesday, by late afternoon trading the currency was sinking against its counterparts. A shift into safe-haven investments late yesterday also helped drive the Aussie further down considering its relatively higher yield. The triple whammy of weak GDP, muted growth in trade surplus and a shift into safe-havens have so far put significant pressure on the AUD in this week's trading. Read more forex trading news on our forex blog. |
| ADP Employment Change Reveals Sluggish Job Growth Posted: 01 Jun 2011 11:41 PM PDT
Automatic Data Processing, Inc.'s (ADP) publication of its Non-Farm Employment Change report revealed a stark downturn in job growth in the US private sector. With an expectation for the creation of 177,000 jobs, yesterday's actual results of 38,000 jobs created caused a stir in global risk appetite. The value of the US dollar (USD) appears to have gained from the news as part of a move into safe-haven investments by forex investors. The greenback was bearish against the other safe-haven currencies, mainly the JPY and CHF, but most significantly it saw solid growth against the EUR which speaks volumes about the movement into the traditional stores of value. Read more forex trading news on our forex blog. |
| Swiss Franc Boosted by Retail Sales Data; Risk Aversion Posted: 01 Jun 2011 11:31 PM PDT
The surprise results from Switzerland's retail sales report yesterday helped the Swiss franc (CHF) make sharp gains against most of its currency rivals. An international shift into safe-haven investments aided this move as forex traders tend to buy the CHF in tough times as a store of value. Switzerland's Federal Statistical Office published a retail sales figure a 7.5%, year-on-year, for the Swiss economy; well beyond the expected 1.9% growth. Last month's reading was published as part of a contraction in spending, but this month's jump carries strong signals of optimism among Swiss consumers. Read more forex trading news on our forex blog. |
| Safe Haven Rally into Friday’s Jobs Report Posted: 01 Jun 2011 11:21 PM PDT
Soft economic data coming from the US put a damper on higher yielding assets such as the euro, equities, and crude oil as the safe haven Swiss franc rallied to new highs. The dollar climbed despite the negative US economic sentiment while the "risk-off" environment could carry over leading up to the Friday's non-farm payrolls report. Today's Economic Data Releases: GBP – Construction PMI – 08:30 GMT USD – Unemployment Claims – 12:30 GMT Oil – Crude Oil Inventories – 15:00 GMT Read more forex trading news on our forex blog. |
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