Currency movers for May 26, 2015

26 May, 2015

EURUSD, Daily

Yesterday the Fed Vice Chairman Fisher commented to the Reuters that he sees rates gradually rising to reach 3.25-4.00% by 2018. He said that the start of the tightening cycle would be determined by data, not a date. And that it is misleading to give so much importance to the Fed’s first rate hike. As the VC Fisher pointed out the rate hikes depend on the data, which gives the Fed a lot of leeway in determining the future interest rates policy.

Last Friday’s CPI surprise from US lifted the dollar index higher and sent the EURUSD lower. My view has been that with Fed being dovish EURUSD having a major correction without an external event would be unlikely. Now such an event has occurred and the market psychology has once again changed to favour the dollar. But this could change. As we have seen the mood swings in this market are constant and can change very quickly. The real test of this newly found readiness to bid for the USD comes when EURUSD hits the vicinity of March and April lows.

After the better than expected CPI figure on Friday pushed EURUSD through the support levels the pair has been drifting lower and crossed below the 50 day MA and lower Bollinger Bands.  EURUSD has declined for six days without a decent rally higher and Stochastics is deeply oversold. That should mean that this downtrend is getting closer to a point where it is vulnerable to corrective rallies. Should there be a rally to the previous support area (1.1084 to 1.1131) it would make sense to look for shorting signals in that range. The 1.1131 resistance is a weekly low from two weeks ago and 1.1084 is a 38.2% Fibonacci level. The next support level is a 61.8% Fibonacci retracement at 1.0845 coinciding with daily highs from April. This could be a reasonable target for intraday short trades.

Currency Pairs, Grouped Performance (% Change)

USD strength with EUR and JPY Weakness are the clear themes this morning. GBPUSD has created a lower high in daily and is now breaking below a support at 1.5447. Next major support area: 1.5046 to 1.5193.  USDJPY pushed higher through the resistances and is now trading above the March high of 1.2202. GBPJPY is trading close to a resistance created by December 2014 high but has found support from a daily sideways range and reacted higher.

Main Macro Events Today

US Durable Goods Orders (Apr) is expected down to -0.5% with shipments growing by 0.5% and inventories by 0.2%, an indication that more and more inventory is held out of the market.
US New Home Sales (MoM) (Apr) is seen rising by 2.9% to 495K compared to previous month’s results which was at 481K. Although the result is higher from March’s results, it is lower by 8.83% in relation to February’s result.
US Consumer Confidence (May) is expected to fall to 93.0 from 95.2 in April, a decrease of 2.36%. Other confidence indicators have declined in May, and Consumer Confidence is more likely to follow them.


Source link  
Stock market recovery continued

Still, U.K. and U.S. futures are also moving higher, indicating that abating fears over North Korea are keeping markets underpinned, while earnings optimism...

NZDJPY beneficiary of Asian session

With a the NZD is overvalued on one side and Sabre rattling between North Korea and the US continuing overnight there was really only...

Euro above 1.18 against the dollar

Asian stock markets moved higher, with a rally in banks underpinned by earnings reports and helping to offset pressure on exporters and automakers...


Gold support at 1258 but rolled over 15m

Gold remains bullish having posted at high over 1265 yesterday. My bias remains long and I entered again at 1258 last night. However, the intraday...

FOMC held rates steady

The Fed’s reluctance to commit to a time for QT beyond “relatively soon” and the fact that the Fed appeared to be moderately more concerned...

FOMC decision to outline its balance

U.S. markets will have a lot on their plates this week as they continue to assess the June jobs data, global developments in the aftermath of the G20 meeting...


Dollar majors have been challenged

EURUSD has settled around 1.1350, modestly above the five-session low posted yesterday at 1.1336. USDJPY has been trading on either side of 113.00...

Yen crosses keep ascending

The yen is coming under pressure across-the-board, with the 0% yielding yen converting back to the funding currency of choice in the forex market...

Oil prices hold above USD 44 per barrel

Asian stock markets mostly headed south, with Australia’s ASX a notable exception. Elsewhere markets followed Wall Street lower...

  


Share: