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
Mixed
Wall Street
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
Gold
Mixed
GBP/USD
Mixed
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
USD/JPY
Mixed
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
More View more
Real Time News
  • (#ASEAN Fundamental Outlook) The US #Dollar is falling against ASEAN currencies such as the Singapore Dollar and Indonesian #Rupiah as stock markets rise. Watch out for US-China escalation and #Brexit talks $USDSGD $USDIDR $USDMYR $USDPHP - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/06/01/US-Dollar-Wilting-as-IDR-SGD-gain-US-China-Spat-Brexit-Talks-Eyed.html?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr https://t.co/esN2pUqyZW
  • RT @FactSet: Since March 31, $SPX forward 12M EPS has declined by 14.2% while $SPX price has increased by 17.2%. https://t.co/eQTjXfg2dc ht…
  • USD/CAD holds near the monthly low (1.3728) after snapping the range bound price action carried over from April, but Canada’s 1Q Gross Domestic Product (GDP) report may undermine the recent decline. Get your $USDCAD market update from @DavidJSong here: https://t.co/47Pjp03afU https://t.co/s4O86pwu2O
  • Market snapshot: #AUD surging with #NZD at the expense of #USD and #JPY. #HKD also down amid political uncertainty while US equity futures trade in the green with APAC stocks
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 1.71% Gold: 0.58% Oil - US Crude: 0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/XnIMS4xarU
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.79% 🇳🇿NZD: 0.52% 🇬🇧GBP: 0.46% 🇪🇺EUR: 0.24% 🇯🇵JPY: 0.09% 🇨🇭CHF: 0.08% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/3TmObf8qMo
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.39%, while traders in US 500 are at opposite extremes with 75.15%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/wjEN7NrhgH
  • #USDKRW down with the pair trading just within the range of the uptrend. Do you think it will break this week? https://t.co/FvyNYJy701
  • Forex Update: $USD continues to weaken against its major counterparts, led by $AUD (+0.86%), while $JPY lags behind (+0.11%). https://t.co/5wayEueKCi
  • GBP/USD: cluster of recent lows around the 1.2160 level and the Tuesday’s low print at 1.2190 may act as the first level of support for the pair. Get your $GBPUSD technical analysis from @nickcawley1 here:https://t.co/yvGzi5hoQw https://t.co/9qFx1oKZsE
Dollar Rallies but Move Hardly Trend Material

Dollar Rallies but Move Hardly Trend Material

2012-01-12 03:13:00
John Kicklighter, Chief Strategist
Share:
  • Dollar Rallies but Move Hardly Trend Material
  • Euro Parked at 16-Month Lows Ahead of ECB Decision, Bond Auctions
  • British Pound: Should Sterling Traders Watch the BoE or ECB for Guidance?
  • Japanese Yen Extraordinarily Quiet
  • Australian Dollar Traders Eye Gold, Oil, Copper other Commodities’ Congestion
  • Gold Nudges Yet Another Four Week High without a Sense of Conviction

Dollar Rallies but Move Hardly Trend Material

The markets are exceptionally quiet. This may not seem that unusual given the proximity to the year-end period; yet historically, speculative activity picks up quickly after the turn of the year (usually by the second week). The best analogy for the current state of activity is that of a deer in the headlights. We can see the fundamental deterioration around us (evidence of recession keeps stacking up, recent rounds of stimulus are falling apart and no fresh capital is making its way into risky assets), but no one wants to be the first to instigate a wholesale unwinding of exposed positions. That is a burden for the dollar which has come so close to embarking on a meaningful bull trend many times now only to falter as hope of stimulus steps in to prevent the purge.

And so, we await the return of volatility with the question of what direction the eventual reversion to normalcy accompanies. The prevailing trend (though lacking for conviction) is currently bullish. Based heavily on the expectations that stimulus and government guarantees will increase through the foreseeable future, we know that hope doesn’t keep markets for long. The bearish projection rests with the unfavorable fundamental ‘facts’. The evidence of a global economic slowdown and credit freeze are unmistakable, but they are not to the point where they can’t be overlooked for hope that governments and central banks will bear the brunt of the pain and fill in for the slack in returns. We need a catalyst to force either the bulls or bears to abandon their forecasts. There are very few, single events that can accomplish that. What gives us a general edge though is the knowledge that there are far fewer bullish scenarios as the stimulus lines are far overstretched and growth is tipping.

Until there is a meaningful shift in sentiment, we will look for the smaller and more volatile swings behind the greenback. In the past session, the notable drop in European currencies offered a significant influx of capital for the world’s most liquid unit. Along the more traditional, fundamental lines; the Treasury auctioned three and 10-year bonds to impressive demand. With demand 3.73 times the supply offered on the three-year note marked the strongest demand on record for the maturity and the 1.90 percent yield on the standard T-note was a record low. Despite flooding the market with debt, it is readily absorbed – speaking to demand for safety. The Beige Book (the Fed’s economic assessment before its policy meeting) noted the economy was growing at a modest to moderate pace. Nothing too supportive; but a boon when others warn of recession.

Euro Parked at 16-Month Lows Ahead of ECB Decision, Bond Auctions

Speaking of recession, the German Federal Statistics Office has sounded the alarm that the Euro Zone’s largest member economy is already one-foot into a slump. According to the group’s unofficial estimates, the German economy contracted approximately 0.25 percent through the fourth quarter (to set 2011 at a 3.0 percent rate of growth). Traditionally, back-to-back quarters of economic contraction signify a technical recession; but regional repercussions that matter here. With the rest of the Euro-area under severe stress at their market- and sovereign debt-levels, the absence of support from the stalwart could open the door to a true economic and financial crisis.

Moving forward, we have major event risk on the horizon. The ECB rate decision is due; but the market is pricing in a certainty of no change – and economists are in agreement. ‘Black Swan’ events are born out of improbable outcomes, so traders should be ready for the off chance that they will surprise with additional accommodation. On the other hand, no change could be a market-stirring outcome on its own. Despite the cheerleading and assurance of policy officials, most see that efforts to rescue the region have consistently crumbled and the risks related to a full-blown financial crisis are growing. Therefore, the absence of support from the central bank could actually drive the euro lower. This may seem counter-intuitive as we usually follow the lines of yields (where high rates are bullish and lower rates bearish); but at this point, risk is far more important than the flimsy reward offered. Another event to keep an eye on is the bond auctions for Italy and Spain. The 10-year bonds for both countries bounced this past session; but it didn’t offer much relief to the fear that the sovereign troubles are spreading. The Spanish auction is first at 9:30 GMT; but the Italian offers are far more important at 10:00 GMT. Fitch has labeled Italy as the biggest risk to Euro Zone stability.

British Pound: Should Sterling Traders Watch the BoE or ECB for Guidance?

The other central bank decision on deck is the Bank of England’s meeting. This too is expected to end in no change to the benchmark lending rate. However, the real interest for the MPC is what they do with the bond purchasing program. The market is showing a low probability of an increase to the 275 billion sterling program this go around, but there is heavy speculation that it will be introduced in the coming months. Nevertheless, GBPUSD is sitting on support at 1.5300 that has been in place for 17 months. Will this be a wasted opportunity for a big move? Perhaps not. Trouble or buoyancy for the euro can easily translate into the same for the sterling.

Japanese Yen Extraordinarily Quiet

The five-day average range for USDJPY is near its lowest level on recent record. So, an already quiet pair has found itself to near comatose levels. This may not be a sign of a major trend brewing; but it is certainly a good indicator of at least a short-term spike in volatility. A breakout looks to be a highly likely outcome; but reserve expectations for follow through unless there is a big shift in risk trends to support it.

Australian Dollar Traders Eye Gold, Oil, Copper other Commodities’ Congestion

There is a reason that the Australian, New Zealand and Canadian currencies are considered to be a part of the commodity bloc. They are all producers of natural resources that they export to their larger neighbors. As such, we should compared the AUDUSD’s congestion to the compression on copper, oil, gold and other natural resources. We should also measure both sides for their respective breakout potential.

Gold Nudges Yet Another Four Week High without a Sense of Conviction

It is a modest one, but gold is nevertheless putting in for a quiet trend. The metal has nudge yet another four-week high as the uncertainty of policy decisions approaches for Europe and the reality that speculative assets are overpriced continues to settle into the collective psyche. The best way for gold to maintain an advance is to do so quietly. Most dramatic activity will likely be reserved for declines.

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

0:00

NZD

ANZ Commodity Price (DEC)

-1.0%

1:30

CNY

Producer Price Index (YoY) (DEC)

1.7%

2.7%

Chinese price pressures steadily diminishing since Summer 2011 on policy tightening and economic slowdown

1:30

CNY

Consumer Price Index (YoY)

4.0%

4.2%

5:00

JPY

Eco Watchers Survey: Current (DEC)

45.0

Could provide insights into extent of slowdown in Japanese economy in coming quarters

5:00

JPY

Eco Watchers Survey: Outlook (DEC)

44.7

6:00

JPY

Machine Tool Orders (YoY) (DEC P)

15.8%

6:30

EUR

French CPI – EU Harmonized (YoY) (DEC)

2.5%

2.7%

Price pressures in the Eurozone expected to remain subdued, giving scope for ECB to maintain loose policy

6:30

EUR

French Consumer Price Index (MoM) (DEC)

0.2%

0.3%

6:30

EUR

French Consumer Price Index (YoY) (DEC)

2.3%

2.5%

7:00

EUR

German Consumer Price Index (MoM) (DEC F)

0.7%

0.7%

7:00

EUR

German Consumer Price Index (YoY) (DEC F)

2.1%

2.1%

7:00

EUR

German CPI – EU Harmonized (YoY) (DEC F)

2.4%

2.4%

7:45

EUR

French Current Account (Euro) (NOV)

-4.5B

France’s triple-A rating to continue to be a central focus of markets

7:45

EUR

French Central Govt. Balance (Euro) (NOV)

-99.4B

9:30

GBP

Industrial Production (MoM) (NOV)

-0.1%

-0.7%

Production in UK remains under pressure from government austerity measures and Eurozone slowdown

9:30

GBP

Industrial Production (YoY) (NOV)

-2.2%

-1.7%

9:30

GBP

Manufacturing Production (MoM) (NOV)

-0.2%

-0.7%

9:30

GBP

Manufacturing Production (YoY) (NOV)

-0.5%

0.3%

10:00

EUR

Eurozone Industrial Production w.d.a. (YoY) (NOV)

0.2%

1.3%

Markets to look for signs of Eurozone recession

10:00

EUR

Eurozone Industrial Production s.a. (MoM) (NOV)

-0.3%

-0.1%

12:00

GBP

BoE Asset Purchase Target (JAN)

275B

275B

No change to loose monetary policy expected; markets to be on lookout for signs of expansion of quantitative easing

12:00

GBP

BoE Interest Rate Decision (JAN 12)

0.50%

0.50%

12:45

EUR

ECB Interest Rate Decision (JAN 12)

1.00%

1.00%

ECB dovish bias to persist; markets to be on lookout for signs of additional credit, bond-market measures

13:30

CAD

New Housing Price Index (MoM) (NOV)

0.2%

0.2%

Canadian housing market relatively stable over past few months

13:30

CAD

New Housing Price Index (YoY) (NOV)

2.4%

2.5%

13:30

USD

Advance Retail Sales

0.3%

0.2%

Recent improvement in consumer sentiment in US could underpin robust retail sales, inventory investment

13:30

USD

Retail Sales ex Auto & Gas (DEC)

0.4%

0.2%

13:30

USD

Retail Sales Less Autos (DEC)

0.3%

0.2%

13:30

USD

Retail Sales “Control Group” (DEC)

0.3%

0.2%

13:30

USD

Initial Jobless Claims (JAN 7)

375K

372K

13:30

USD

Continuing Claims (DEC 31)

3595K

3595K

15:00

GBP

NIESR GDP Estimate (DEC)

0.3%

1/11-15

CNY

Foreign Exchange Reserves (DEC)

3201.7B

GMT

Currency

Upcoming Events & Speeches

8:30

EUR

Italy’s Monti Addresses Chamber of Deputies on Economy

SUPPORT AND RESISTANCE LEVELS

To see updated SUPPORT AND RESISTANCE LEVELS for the Majors, visit Technical Analysis Portal

To see updated PIVOT POINT LEVELS for the Majors and Crosses, visit our Pivot Point Table

CLASSIC SUPPORT AND RESISTANCE

EMERGING MARKETS & SCANDIES CURRENCIES 18:00 GMT

Currency

USD/MXN

USD/TRY

USD/ZAR

USD/HKD

USD/SGD

Currency

USD/SEK

USD/DKK

USD/NOK

Resist 2

16.5000

2.0000

9.2080

7.8165

1.3650

Resist 2

7.5800

5.6625

6.1150

Resist 1

14.3200

1.9000

8.5800

7.8075

1.3250

Resist 1

6.5175

5.3100

5.7075

Spot

13.6089

1.8550

8.0912

7.7682

1.2926

Spot

6.9429

5.8489

6.0404

Support 1

12.6000

1.6500

6.5575

7.7490

1.2000

Support 1

6.0800

5.1050

5.3040

Support 2

11.5200

1.5725

6.4295

7.7450

1.1800

Support 2

5.8085

4.9115

4.9410

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

1.2885

1.5481

77.53

0.9666

1.0295

1.0443

0.8074

99.10

119.15

Resist. 2

1.2842

1.5441

77.37

0.9634

1.0269

1.0406

0.8046

98.76

118.82

Resist. 1

1.2799

1.5402

77.21

0.9603

1.0242

1.0370

0.8018

98.43

118.48

Spot

1.2714

1.5322

76.89

0.9539

1.0188

1.0296

0.7961

97.76

117.81

Support 1

1.2629

1.5242

76.57

0.9475

1.0134

1.0222

0.7904

97.09

117.14

Support 2

1.2586

1.5203

76.41

0.9444

1.0107

1.0186

0.7876

96.76

116.81

Support 3

1.2543

1.5163

76.25

0.9412

1.0081

1.0149

0.7848

96.42

116.47

v

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

To contact John, email jkicklighter@dailyfx.com. Follow me on twitter at http://www.twitter.com/JohnKicklighter

To be added to John’s email distribution list, send an email with the subject line “Distribution List” to jkicklighter@dailyfx.com.

Additional Content:

Money Management Video

Trading the News Video

http://forexforums.dailyfx.com/dailyfx-education-videos-forex-trading-strategies/89952-dailyfx-trading-news.html

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

DISCLOSURES

News & Analysis at your fingertips.