German ZEW survey fails to impress, as inflation remains a concern amidst record oil prices
U.S. Dollar Trading (USD)
U.S. Dollar Trading (USD) The low headline figure of the April US PPI was seen at 0.2% vs 0.4% hurt the USD as focus on inflation in other economies took focus, as result US bond yields fell. The core US PPI figures were stronger then expected, coming in at 0.4% vs 0.2% forecasts. The U.S share markets fell sharply with NASDAQ down 23.83 points (-.95%) and DOW JONES down 199 points (1.53%). Crude oil broke another record high gaining 1.78% to $129 per barrel on continued supply constraints and weak USD. Looking ahead on Wednesday the FOMC minutes is made public, where it is expected to explain the Fed’s decision to cut rate by .25% to 2% in April.
European Euro
The Euro (EURO) saw the ZEW survey come in at -41.4 weaker then the expected -37.5. Although traders paid little attention to number, instead finding confidence to long the single currency as comments from the ZEW president, Wolfgang Franz hinted that a rate hike from ECB was likely to help counter inflation. The EURUSD traded with a low of 1.5505 and a high of 1.5680 before closing the day at 1.5645 in the New York session. Looking ahead, important data out today from the Euro-zone German IFO business climate Index expected to come in at 102.1.
Japanese Yen (JPY)
The Japanese Yen (JPY) Muted reaction to Bank of Japans unanimous decision to hold rates at 0.5%, with no change to economic outlook although it was noted that risks are still to the downside. The share market falls weighed heavily on the USDJPY overnight as per usual. The USDJPY traded with a low of 103.47 and a high of 104.47 before closing the day around 103.65 in the New York session. Looking ahead there is no data out today from Japan.
Pound Sterling (GBP)
The Sterling (GBP) With little data out the UK, the Sterling Pound tracked other currencies gaining 1% against broadly weaker dollar. Overall the GBPUSD traded with a low of 1.9483 and a high of 1.9718 before closing the day at 1.9680 in the New York session. Looking ahead, today the MPC minutes are released with markets expecting an 8-1 split of the April rate decision to hold at 5.00%.
Australian Dollar (AUD)
The Australian Dollar (AUD) rallied following hawkish RBA minutes which highlighted that policy makers were considering another rate rise during the May 6 meeting. As a result the Aussie set new multi-year highs above the 96 cents, touching 0.9619 (24 year high). Adding to further Aussie strength were comments that the currency could have been potentially higher given the current commodity surge. AUD/JPY broke through the key level of 100 but as unable to continue higher as falling equities weighed heavy on the so called carry trade. Overall the AUDUSD traded with a low of 0.9571 and a high of 0.9619 before closing the day at 0.9585 in the New York session. Looking ahead, the Westpac Consumer Sentiment is out today with expectations of a rebound to 1.8% from last months -1.3%. UPDATE: Westpac consumer confidence sent at 2.7% for the month May.
Gold
Gold (XAU) continued to rally above $900 as surging as crude oil prices hit record highs. Overall trading with a low of 903.35 and high of 923.40 ending the New York session at $920.
Technical Analysis: Forex Trading News Today
Euro (EUR)
Euro – 1.5650 : Initial support at 1.5504 (May 20 low) followed by 1.5438 (May 16 low). Initial resistance is now located at 1.5681 (May 20 high) followed by 1.5712 (Former Support Apr 18).
Yen (JPY)
Yen – 103.60 : Initial support is located at 103.39 (May 13 low) followed by 102.58 (May 12 low). Initial resistance is now at 104.48 (May 20 high) followed by key 105.44 (May 14 high).
Pound Sterling (GBP)
Pound – 1.9675 : Initial support at 1.9480 (May 20 low) followed by 1.9443 (May 16 low). Initial resistance is now at 1.9736 (May 7 high) followed by 1.9784 (May 9 high).
Australian Dollar (AUD)
Australian Dollar – 0.9580 : Initial support a 0.9511 (May 19 low) followed by 0.9392 (May 16 low). Initial resistance is now at 0.9618 (May 20 trend high) followed by 0.9723 (open this week + range last week*0.618).
Gold (XAU)
Gold – 920 : Initial support at 901 (May 19 low) followed by 880.5 (May 16 low). Initial resistance is now at 923.6 (May 20 high) followed by 928.75 (Apr 21 high).
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