We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bullish
Oil - US Crude
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bullish
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • A recession is typically accompanied by falling stock prices, but equities are not the be-all and end-all for recession investment strategies. Get your market update from @PeterHanksFX here: https://t.co/H0Rf3AkECs https://t.co/5Il5ptMnMu
  • The $USD may rise versus the Singapore Dollar, Indonesian Rupiah and Malaysian Ringgit if capital flows out of #ASEAN countries as key U.S. data risks a selloff in equities. Get your market update from @ddubrovskyFX here: https://t.co/JWIRn6MLrK https://t.co/y2tXiYs9aV
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/H6I3MXjW06
  • As prices dance around on charts, traders are often looking for reasons to explain price movements; however, the underlying source of price movement boils down to the relationship between supply and demand. Learn more about the forces of S&D on forex here: https://t.co/8LfkLXbj2W https://t.co/ZsHdd9NFcO
  • The $USD may be at risk as trader positioning warns that the S&P 500 may bounce as markets look forward to fiscal stimulus. USD/CAD could rise if key support holds down the road.Get your market update from @ddubrovskyFX here:https://t.co/TMq9VZbZ7W https://t.co/TisnGYxllM
  • Here my weekend trading video 'Dow, VIX, Dollar and Gold: Levels and Volatility to Gauge the Markets' https://www.dailyfx.com/forex/video/daily_news_report/2020/03/28/Dow-VIX-Dollar-and-Gold-Levels-and-Volatility-to-Gauge-the-Markets-.html?ref-author=Kicklighter&QPID=917719&CHID=9
  • #Silver and #gold prices have had a fascinating 2020, counterintuitively falling as the #coronavirus’ economic hit has become horribly apparent. A rebound is now afoot. Get your market update from @DavidCottleFX here: https://t.co/nng7lwQ22E https://t.co/JwehIVbBA2
  • Foreign exchange – or “#forex” – markets often pay close attention to politics and central bank policy. We offer a model for traders to gauge their impact on exchange rates. Get your market insight from @ZabelinDimitri and @CVecchioFX here: https://t.co/FbXc1Awu6a https://t.co/mcq5Bq2Jui
  • The $USD soared against the Indonesian Rupiah, with USD/IDR eyeing its best month since the 1997-98 Asia financial crisis amid the #coronavirus outbreak. Can this trend continue? Find out from @ddubrovskyFX here:https://t.co/M3sDZOftrE https://t.co/sbIbp68UOh
  • The $USD may be at risk as technical signals show USD/SGD, USD/MYR and USD/IDR may turn lower. Ahead, the markets will likely weigh US fiscal stimulus bets against dismal data risk. Get your market update from @ddubrovskyFX here:https://t.co/iGqBrY6qyO https://t.co/kJ89YgK3Mm
Dollar and S&P 500 will See Significant Repercussion in FOMC Minutes

Dollar and S&P 500 will See Significant Repercussion in FOMC Minutes

2011-08-31 03:44:00
John Kicklighter, Chief Strategist
Share:
  • Dollar and S&P 500 will See Significant Repercussion in FOMC Minutes
  • Euro Slides as Data, Financial Conditions Continue to Deteriorate
  • Canadian Dollar Offers Limited Reaction to 2Q Trade, But What about 2Q GDP?
  • British Pound Moving Closer and Closer to Stimulus Expansion
  • Swiss Franc Shows No Gain with Euro’s Pullback Tuesday
  • Will Japan’s New Prime Minister Finally Improve Market, Fiscal Conditions?
  • Gold Maintains its Volatility with Another Sharp Rally as EU, US Troubles Grow

Dollar and S&P 500 will See Significant Repercussion in FOMC Minutes

Scheduled event risk painted a remarkable picture for traders Tuesday – even if price action would suggest otherwise. Both the Conference Board Consumer Confidence survey for August and the meeting minutes from the Fed’s August 9th policy gathering offered remarkable surprises that will no doubt carry significant consequence for the capital markets and dollar over the coming weeks and months. That said, neither equities nor the greenback showed more than a brief jump in volatility after the respective releases. Does this mean these fundamentals have already been priced in? Partly. But, more importantly, this limited reaction falls under the scope of current market conditions. Major breakouts and trend generation simply cannot find traction in the current trading environment until one of the primary themes shakes the foundations of financial stability and liquidity. And, neither of these developments could rise to the challenge.

Of the two headlines out of the US this past session, the more remarkable update came from the Fed’s minutes. We had assumed ahead of time that the statement would be a non-event since Chairman Ben Bernanke had set us on course to the September 21st policy decision with his speech at the Jackson Hole conference this past Friday. His suggestion that the central bank still has a ‘range of tools’, and that the next meeting would be extended a day to discuss these options, raised the threat of further stimulus a few notches. That lean no doubt restrained the highlights from the minutes. Nevertheless, the notes in this report were far more explicit. Aside from the suggestion that some policy officials deemed “more substantial” assistance necessary (Chicago Fed President Evans admitted to this during the day) and commodity inflation was transitory; the report stated that the group was already discussing alternative policy venues. Setting explicit guidance on economic figures and change the rate on excess reserves are write offs; but the possibility of further asset purchases and changing the maturity of balance sheet holdings are real options. If there is a chance of further stimulus next month, it will likely see a chance in the balance sheet holdings, not size.

The other remarkable release for the day, the sentiment survey, was an unmistakable ‘surprise’. The reading reported well below expectations after with the lowest reading since April of 2009 after the biggest monthly drop since October 2008 (we all know what happened back then). Sentiment is a necessity to spending and consumer spending is essential for last growth. That said, this data confirms what we already knew – that the economy is grinding to a halt and that financial issues are turning into economic troubles. Nonetheless, data like this tears away at complacency. Both this gauge and the minutes will likely leverage the market impact of the upcoming ADP and Friday’s NFPs release.

Related:Discuss the Dollar in the DailyFX Forum, John’s Videos: Why Fed Minutes Curb Market Conditions More than the US Dollar

Euro Slides as Data, Financial Conditions Continue to Deteriorate

The euro slid against its US and Japanese counterparts Tuesday though risk appetite trends were otherwise stable. This suggests the currency was reflecting its own fundamental shortfalls rather than the oscillation in sentiment for the broader market. From the docket, we learned that Euro Zone economic confidence posted its biggest drop since December of 2008 (seems the Euro is on the same level as the US now). Just as notable was Italy’s bond auction (its first since the ECB starting buying government debt). The yields dropped but not to levels synonymous with stability. And, another headline, the IASB is reportedly ‘greatly concerned’ about the small write downs on Euro-banks Greek exposure.

Canadian Dollar Offers Limited Reaction to 2Q Trade, But What about 2Q GDP?

The Canadian dollar had notable data to work with these past 24 hours; but it didn’t fall into the critical veins of the market’s interest. The 2Q current account deficit ballooned more than expected to a C$15.3 billion shortfall (the second largest on record); but that wasn’t seen as materially undermining the currency’s greenback-alternative appeal. The upcoming 2Q GDP reading won’t be as isolated.

British Pound Moving Closer and Closer to Stimulus Expansion

Event risk from the UK this past session has furthered the argument for further BoE bond purchases in the not-too-distant future. Ignoring the mortgage approvals for July, we noted that the National Housing Federation forecasted the lowest level of home ownership since the 1980’s going forward. Easier to grasp was the GfK’s consumer sentiment survey for August which dropped to its lowest reading since February 2009.

Swiss Franc Shows No Gain with Euro’s Pullback Tuesday

We noted a drop in the euro against its US and Japanese counterparts (supposed safe havens); so why didn’t the franc leverage a rally of its own this past session? After marked corrections, previously consistent trends carry less sway. With the franc, the sharp slide and imposing threat of a peg (supposedly around current levels) curbs any bid efforts that are less than certain.

Will Japan’s New Prime Minister Finally Improve Market, Fiscal Conditions?

Japan welcomes its sixth Prime Minister in five years; and he has a lot of work ahead of him. Typically we expect changes in regime to provide momentum to make necessary changes (like guiding Japan out of its long-term financial stagnation or helm the economic recovery); but Noda is not going to have an easy time with this. The outlook is unmoved for the Japan – and therefore its long-term bearish lean remains.

Gold Maintains its Volatility with Another Sharp Rally as EU, US Troubles Grow

Volatility has backed off across the financial markets as we are now in a holding pattern for the possibility of further US stimulus next month. However, gold seems to have broken from that trend. The precious metal posted a remarkable rally Tuesday to fully offset its previous session losses. Why is this commodity still moving aggressively? Because it is one of the few assets that marks a good alternative to currencies.

For Real Time Forex News, visit: http://www.dailyfx.com/real_time_news/

**For a full list of upcoming event risk and past releases, go to www.dailyfx.com/calendar

ECONOMIC DATA

Next 24 Hours

GMT

Currency

Release

Survey

Previous

Comments

0:30

AUD

RPData-Rismark House Px Raw (JUL)

-0.6%

Higher house prices buoyed by demand may lead to an expansion of the construction sector

0:30

AUD

RPData-Rismark House Px s.a. (JUL)

-0.2%

1:00

NZD

NBNZ Activity Outlook (AUG)

43.7

Activity surveys weakening as global recovery slows, rate hike on the horizon

1:00

NZD

NBNZ Business Confidence (AUG)

47.6

1:30

JPY

Labor Cash Earnings (YoY) (JUL)

-0.5%

-0.7%

BoJ unlikely to raise rates on slower fall

1:30

AUD

Private Sector Credit (MoM) (JUL)

0.2%

-0.1%

Credit expected to stay the same on less borrowing, restricted credit

1:30

AUD

Private Sector Credit (YoY) (JUL)

2.7%

2.7%

3:00

NZD

Money Supply M3 (YoY) (JUL)

7.3%

Could fall as demand slows for NZ goods

4:00

JPY

Vehicle Production (YoY) (JUL)

-13.9%

Strong yen seen as hurting exports

5:00

JPY

Construction Orders (YoY) (JUL)

6.0%

Construction demand seen to still increase as rebuilding efforts continue, though slowing due to capital drying up

5:00

JPY

Annualized Housing Starts (JUL)

0.829M

0.817M

5:00

JPY

Housing Starts (YoY) (JUL)

4.9%

5.8%

6:00

EUR

German Retail Sales MoM (JUL)

-1.5%

4.5%

Falling retail sales could hinder rates hikes in the near future

6:00

EUR

German Retail Sales YoY (JUL)

-0.8%

-1.0%

7:55

EUR

German Unemployment Change (AUG)

-10K

-11K

German labor markets expected to weaken at a slower pace, though still pointing to troubles

7:55

EUR

German Unemployment Rate s.a. (AUG)

7.0%

7.0%

8:00

EUR

Italian Unemployment Rate s.a. (JUL P)

8.0%

8.0%

Italian unemployment in plateau

9:00

EUR

Euro-Zone CPI Estimate (YoY) (AUG)

2.5%

2.5%

Eurozone 17 data not expected to change ECB rate decisions soon

9:00

EUR

Euro-Zone Unemployment Rate (JUL)

9.9%

9.9%

9:00

EUR

Italian CPI (NIC incl. tobacco) (MoM) (AUG P)

0.2%

0.3%

Italian prices expected mostly stable, unlikely to have large effect on ECB rate decisions or views on economy

9:00

EUR

Italian CPI (NIC incl. tobacco) (YoY) (AUG P)

2.7%

2.7%

9:00

EUR

Italian CPI - EU Harmonized (MoM) (AUG P)

0.2%

-1.7%

9:00

EUR

Italian CPI - EU Harmonized (YoY) (AUG P)

2.1%

2.1%

10:00

EUR

Italian Producer Price Index (MoM) (JUL)

0.4%

0.1%

10:00

EUR

Italian Producer Price Index (YoY) (JUL)

4.8%

4.7%

11:00

USD

MBA Mortgage Applications (AUG 26)

-2.4%

New apps may be higher on rates promise

11:30

USD

Challenger Job Cuts (YoY) (AUG)

59.0%

Preliminary surveys ahead of Friday’s NFPs expected to weaker, though bearing will be on actual reported tat

12:15

USD

ADP Employment Change (AUG)

103K

114K

12:30

CAD

Gross Domestic Product (YoY) (JUN)

2.2%

Canadian output could slow as weaker US demand cutting into Canadian productivity

12:30

CAD

Quarterly Gross Domestic Product Annualized (Q2)

0.0%

3.9%

12:30

CAD

Gross Domestic Product (MoM) (JUN)

0.1%

-0.3%

13:00

CAD

Teranet/National Bank HPI (MoM) (JUN)

1.3%

House price index seeing declines as demand dropping

13:00

CAD

Teranet/National Bank HP Index (JUN)

142.27

13:00

CAD

Teranet/National Bank HPI (YoY) (JUN)

4.4%

13:45

USD

Chicago Purchasing Manager (AUG)

53.5

58.8

US manufacturing data showing overall cautiousness on lower dmenad

14:00

USD

Factory Orders (JUL)

1.8%

-0.8%

14:00

USD

NAPM-Milwaukee (AUG)

52.9

57.6

14:30

USD

DOE U.S. Crude Oil Inventories (AUG 26)

-2213K

Negative inventories for crude indicates an upswing in larger industrial demand

14:30

USD

DOE Cushing OK Crude Inventory (AUG 26)

-26K

14:30

USD

DOE U.S. Distillate Inventory (AUG 26)

1731K

14:30

USD

DOE U.S. Gasoline Inventories (AUG 26)

1355K

22:45

NZD

Terms of Trade Index (QoQ) (Q2)

0.9%

NZ trade expected to grow slower

23:30

AUD

AiG Performance of Manufacturing Index (AUG)

43.4

Survey in shrinking territory

GMT

Currency

Upcoming Events & Speeches

16:30

USD

Fed's Lockhart Speaks on Economy in Lafayette

SUPPORT AND RESISTANCE LEVELS

CLASSIC SUPPORT AND RESISTANCE - 18:00 GMT

Currency

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

EUR/JPY

GBP/JPY

Resist 2

1.5160

1.6745

86.00

0.8560

1.0275

1.0750

0.9020

118.00

146.05

Resist 1

1.5000

1.6600

81.50

0.8275

1.0000

1.0800

0.8750

113.50

140.00

Spot

1.4450

1.6308

76.67

0.8193

0.9778

1.0709

0.8548

110.79

125.03

Support 1

1.4000

1.5935

76.35

0.7500

0.9425

1.0350

0.7745

109.00

124.00

Support 2

1.3700

1.5750

75.50

0.7000

0.9055

0.9925

0.6850

106.00

119.00

CLASSIC SUPPORT AND RESISTANCE EMERGING MARKETS 18:00 GMTSCANDIES CURRENCIES 18:00 GMT

Currency

USD/MXN

USD/TRY

USD/ZAR

USD/HKD

USD/SGD

Currency

USD/SEK

USD/DKK

USD/NOK

Resist 2

13.8500

1.8235

7.4025

7.8165

1.3650

Resist 2

7.5800

5.6625

6.1150

Resist 1

12.5000

1.8000

7.3500

7.8075

1.3250

Resist 1

6.5175

5.3100

5.7075

Spot

12.5040

1.7322

7.0759

7.7932

1.2048

Spot

6.3461

5.1564

5.3565

Support 1

11.5200

1.6500

6.5575

7.7490

1.2000

Support 1

6.0800

5.1050

5.3040

Support 2

11.4400

1.5725

6.4295

7.7450

1.1800

Support 2

5.8085

4.9115

4.9410

INTRA-DAY PIVOT POINTS 18:00 GMT

Currency

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

EUR/JPY

GBP/JPY

Resist 2

1.4604

1.6493

77.11

0.8294

0.9843

1.0776

0.8621

112.36

127.05

Resist 1

1.4527

1.6400

76.89

0.8244

0.9811

1.0742

0.8585

111.58

126.04

Pivot

1.4456

1.6328

76.76

0.8182

0.9784

1.0682

0.8522

111.01

125.35

Support 1

1.4379

1.6235

76.54

0.8132

0.9752

1.0648

0.8486

110.23

124.34

Support 2

1.4308

1.6163

76.41

0.8070

0.9725

1.0588

0.8423

109.66

123.66

INTRA-DAY PROBABILITY BANDS 18:00 GMT

\Currency

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

EUR/JPY

GBP/JPY

Resist. 3

1.4644

1.6485

77.55

0.8323

0.9884

1.0871

0.8687

112.54

126.73

Resist. 2

1.4596

1.6441

77.33

0.8291

0.9858

1.0831

0.8652

112.10

126.31

Resist. 1

1.4547

1.6397

77.11

0.8258

0.9831

1.0790

0.8617

111.66

125.88

Spot

1.4450

1.6308

76.67

0.8193

0.9778

1.0709

0.8548

110.79

125.03

Support 1

1.4353

1.6219

76.23

0.8128

0.9725

1.0628

0.8479

109.92

124.18

Support 2

1.4304

1.6175

76.01

0.8095

0.9698

1.0587

0.8444

109.48

123.76

Support 3

1.4256

1.6131

75.79

0.8063

0.9672

1.0547

0.8409

109.04

123.33

v

Written by: John Kicklighter, Senior Currency Strategist for DailyFX.com

To receive John’s reports via email or to submit Questions or Comments about an article; email jkicklighter@dailyfx.com

Follow John on twitter at http://www.twitter.com/JohnKicklighter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.