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
Mixed
GBP/USD
Bullish
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
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
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
Oil - US Crude
Mixed
Bitcoin
Bearish
More View more
Real Time News
  • #Gold prices may fall while the US Dollar gains even as economic policies championed by the Trump administration invite inflation. Get your market update from @IlyaSpivak here: https://t.co/4lHhHsby56 $XAUUSD https://t.co/JmZxckVHdS
  • Cable (GBP/USD) remains just off its seven-month high print around 1.3165 as traders start to move to the side lines ahead of next Thursday’s General Election vote. Get your $GBPUSD market update from @nickcawley1 here: https://t.co/CpCh13J9ZH #Brexit https://t.co/PIh6WUqbsK
  • (Weekly Technical Outlook) GBP/USD, EUR/GBP, GBP/JPY, GBP/CAD Outlook as UK Election Looms $GBPUSD $EURGBP $GBPJPY #UKelection2019 - https://www.dailyfx.com/forex/technical/article/fx_technical_weekly/2019/12/07/GBPUSD-EURGBP-GBPJPY-GBPCAD-Outlook-as-UK-Election-Looms.html?CHID=9&QPID=917702 https://t.co/iuILHYczJ7
  • Why do you require consistency in trading and why does it matter? Find out: https://t.co/WlEFlluGfZ #tradingstyle https://t.co/TkMtJQKatx
  • By issuing debt denominated in $USD, China is making a long-term bet that it will be cheaper to pay back its loans over time in the US Dollar; it believes the value of the US Dollar will fall. Get your market update from @CVecchioFX here:https://t.co/5GO9UrvO4y https://t.co/xV9urXXf48
  • What are some risk trading management techniques? Find out: https://t.co/RShdlDz9RA #tradingstyle https://t.co/M3ASPIHAep
  • #Dow Jones stages impressive recovery on a firm NFP report. #FTSE 100 eyes UK general election. Get your equities technical analysis from @JMcQueenFX here: https://t.co/o28UcG6N3l https://t.co/SwGAaFCFND
  • Why do you require consistency in trading and why does it matter? Find out: https://t.co/f4y1FOOZnM #tradingstyle https://t.co/x5HgYopWc5
  • The USD may rise if the FOMC re-affirms its data-dependent approach and cools 2020 rate cut bets. US retail sales and CPI data may also give the Fed impetus to hold rates. Get your $USD market update from @ZabelinDimitri here: https://t.co/XnDITaDOox https://t.co/A480uVMqF2
  • What tools does the ECB have left to stimulate the Eurozone? Where is the #Euro heading? Find out from Chief Eurozone Economist at Pantheon Macroeconomics Claus Vistesen only on Trading Global Markets Decoded #podcast hosted by @MartinSEssex here:https://t.co/Twr44cZ1GB https://t.co/DXlDH5Cp9e
Dollar Finds Capital Market Uncertainties Offset Wavering Fed Rhetoric

Dollar Finds Capital Market Uncertainties Offset Wavering Fed Rhetoric

2014-09-23 05:35:00
John Kicklighter, Chief Currency Strategist
Share:

Talking Points:

  • Dollar Finds Capital Market Uncertainties Offset Wavering Fed Rhetoric
  • British Pound Tops Majors’ Performance as Focus Returns to BoE
  • Euro Pressure Remains as Consumer Confidence Falls, Draghi Commits to Stimulus

Dollar Finds Capital Market Uncertainties Offset Wavering Fed Rhetoric

While Fed rate speculation tempered its support for the US Dollar to start the week, a shift in sentiment moved in to supplement the bulls. Having passed last week’s fireworks (Fed decision big amongst the high profile event risks) without risk trends imploding, we still find investors uneasy about the future’s prospects. From the usual list of suspects, we would see a substantial dimming in speculative confidence. Most prominent on the day was the drop in global equities which pulled indexes from the US to Europe to Asia back from multi-year or record highs. Joining the fray was a sharp drop in Emerging Markets, a high-yield debt slip and fresh multi-year low for the CRB commodities index. A uniform drop from these very different asset types implies sentiment itself is shifting course rather than an individual market simply causing ripples.

However, in the slip for optimism Monday, the FX market offered up the most measured response. Where the equities-based VIX jumped 13 percent (to 13.7) for the day, the FX volatility measure ticked down modestly. It should be noted though that the market’s activity measure is generally a more deliberate and trend-prone measure. As for the greenback’s haven status, the intensity didn’t seem to hit the fervor associated to blind liquidity demand. A good litmus test for full-scale fear would be a dollar climb against all counterparts with the exception of USDJPY – which would experience a carry unwind before liquidity would come into play.

If it weren’t for the market-wide adjustment, the Dollar’s own fundamental offerings would have likely seen it slip further. On the docket, the August National Activity Index from the Chicago Fed slipped back into negative territory unexpectedly and existing home sales for the same month dropped 1.8 percent. Between two Fed speeches, Kocherlakota maintained his outright dovish stance; while Dudley was noncommittal by saying he would like to see a hike in 2015, but the move couldn’t be rushed. Ahead, the Markit manufacturing survey for September is a higher-profile release, and a range of Fed engagements (from Bullard, Powell, George and Kocherlakota) will keep rate watchers busy.

British Pound Tops Majors’ Performance as Focus Returns to BoE

The Sterling advanced against all of its major counterparts Monday – a considerable feat given its performance these past weeks. The spark for bulls was not found in event risk as the docket was clear. Rather, the passing of the cloud of uncertainty surrounding Scotland’s independence vote (which ended with a ‘no’ majority) has put the focus back on a theme that has been supportive on the balance of the past year: rate expectations. Looking at the various instruments particularly sensitive to policy changes, we have seen a clear balance after the retreat measure from mid-July. Gilt yields, swaps, Libor rates and even the pound had all found some level of balance before the Referendum came into view. Has the currency exercised its premium excesses? Data will have a more tangible impact with BBA home loans a first step today.

Euro Pressure Remains as Consumer Confidence Falls, Draghi Commits to Stimulus

Despite unflattering headlines, the Euro managed to recover lost ground against the bulk of the majors – though not enough to inspire expectations of a committed bull trend. ECB President Draghi reminded us why a change course will be difficult for the shared currency. In his testimony before the EU Parliament, the central banker reiterated the group’s dedication to easing monetary slack and boost its balance sheet in the wake of a small uptake on last week’s Targeted-LTRO allotment. Meanwhile, data may give officials – and markets – a firmer grip on the need for unorthodox support with September PMIs on tap after Monday’s disappointing turn for the consumer sentiment read.

Japanese Yen: OECD Suggests Currency Not the Most Important Factor for Exports

A weaker currency may not solve what ails Japan’s trade troubles – much less its broader economic ills. Monday, OECD Deputy Secretary-General Tamaki joined those pointing out the disconnect between the nation’s foreign business and considerable drop in the Yen. While officials (government and BoJ) have not maintained the intensity of their verbal campaign to see the currency driven lower, the sense of hope has been difficult to mistake. If global growth fails to materialize and/or local troubles deepen, the Yen crosses can paradoxically tumble.

Australian Dollar Jostled by Chinese Headlines

The Aussie dollar has had a volatile start to the week with a range of Chinese event risk to work its fundamental connection to the economic giant. For the bears, the CBB’s ‘Beige Book’ for China reported the economy was ‘stuck in low gear’ for 3Q and a bottom was still not visible. Yet, this morning, the HSBC manufacturing PMI printed better-than-expected. It’s little surprise AUDUSD swung 100 pips so far.

Emerging Market ETF Collapses Through Support, Liquid EM Currencies Tumble

While there was a broad range of asset classes that succumbed to a ‘risk aversion’ sentiment this past session, the Emerging Market’s arguably lead the drop. The MSCI ETF dropped 1.5 percent – the biggest drop in seven weeks – to trade at lows last seen in early June. From the FX side, the more liquid currencies were deep red. Risk aversion and stimulus moderation leverage the EM pain.

Gold: Speculative ETF Holdings Hit Fresh 5-Year Low, Leads Commodities Lower

Gold was ultimately little changed Monday, but that does little to brighten the mood. Measuring the appetite for the commodity, speculator futures demand (via the COT) saw a fifth consecutive week of selling long positions while ETF holdings dropped to a five-year low. Gold is just one commodity that has slipped as the dollar gains and global manufacturing economies (like China) have moderated.

**Bring the economic calendar to your charts with the DailyFX News App.

ECONOMIC DATA

GMT

Currency

Release

Survey

Previous

Comments

1:45

CNY

HSBC PMI Manufacturing (SEP P)

50

50.2

6:45

EUR

French Gross Domestic Product (QoQ) (2Q F)

0.0%

0.0%

6:45

EUR

French Own-Company Production Outlook (SEP)

-7

6:45

EUR

French Business Confidence (SEP)

91

91

7:00

EUR

Markit French PMI Manufacturing (SEP P)

47

46.9

7:00

EUR

Markit French PMI Services (SEP P)

501

50.3

7:00

EUR

Markit French PMI Composite (SEP P)

49.4

49.5

7:30

EUR

Markit German PMI Manufacturing (SEP P)

51.2

51.4

7:30

EUR

Markit German PMI Services (SEP P)

54.6

54.9

7:30

EUR

Markit German PMI Composite (SEP P)

53.5

53.7

8:00

EUR

Markit Euro-Zone PMI Manufacturing (SEP P)

50.6

50.7

8:00

EUR

Markit Euro-Zone PMI Services (SEP P)

53

53.1

8:00

EUR

Markit Euro-Zone PMI Composite (SEP P)

52.5

52.5

8:30

GBP

BBA Loans for House Purchase (AUG)

43000

42792

8:30

GBP

Public Finances (PSNCR) (£) (AUG)

6.0B

-9.7B

8:30

GBP

Public Sector Net Borrowing- Central Govt (AUG)

-2.4B

8:30

GBP

Public Sector Net Borrowing (£) (AUG)

10.1B

-1.1B

8:30

GBP

Public Sector Net Borrowing ex Interventions (£) (AUG)

11.9B

0.24B

12:30

CAD

Retail Sales (MoM) (JUL)

0.4%

1.1%

12:30

CAD

Retail Sales Less Autos (MoM) (JUL)

-0.2%

1.5%

13:00

USD

House Price Index (MoM) (JUL)

0.5%

0.4%

13:45

USD

Markit PMI Manufacturing (SEP P)

58.0

57.9

22:45

NZD

Trade Balance (New Zealand dollars) (AUG)

-1125M

-692M

22:45

NZD

Exports (New Zealand dollars) (AUG)

3.20B

3.70B

GMT

Currency

Upcoming Events & Speeches

7:00

EUR

EU's Almunia to Testify to EU Parliament

11:30

EUR

Germany's Merkel and Greece's Samaras Speak on Greece Economy

13:00

USD

Fed's James Bullard Speaks on U.S. Economy

13:20

USD

Fed's Jerome Powell Speaks on U.S. Economy

13:30

USD

Fed's Esther George Speaks on U.S. Economy

17:00

USD

US to Sell $29 Bln in 2-Year Notes

18:00

USD

Fed's Narayan Kocherlakota Speaks on U.S. 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 18:00 GMT

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

13.5800

2.3800

12.7000

7.8165

1.3650

Resist 2

7.5800

5.8950

6.7400

Resist 1

13.3250

2.3000

11.8750

7.8075

1.3250

Resist 1

7.3285

5.8475

6.5135

Spot

13.2782

2.2413

11.1642

7.7515

1.2679

Spot

7.1499

5.7917

6.3469

Support 1

12.8350

2.0700

10.2500

7.7490

1.2000

Support 1

6.7750

5.3350

6.3145

Support 2

12.6000

1.7500

9.3700

7.7450

1.1800

Support 2

6.0800

5.2715

6.1300

INTRA-DAY PROBABILITY BANDS 18:00 GMT

\CCY

EUR/USD

GBP/USD

USD/JPY

USD/CHF

USD/CAD

AUD/USD

NZD/USD

EUR/JPY

Gold

Res 3

1.2943

1.6491

109.71

0.9468

1.1129

0.8962

0.8186

140.91

1238.66

Res 2

1.2921

1.6464

109.48

0.9450

1.1109

0.8941

0.8166

140.64

1233.42

Res 1

1.2898

1.6436

109.25

0.9432

1.1088

0.8921

0.8146

140.37

1228.18

Spot

1.2853

1.6382

108.80

0.9395

1.1047

0.8879

0.8106

139.83

1217.70

Supp 1

1.2808

1.6328

108.35

0.9358

1.1006

0.8837

0.8066

139.29

1207.22

Supp 2

1.2785

1.6300

108.12

0.9340

1.0985

0.8817

0.8046

139.02

1201.98

Supp 3

1.2763

1.6273

107.89

0.9322

1.0965

0.8796

0.8026

138.75

1196.74

v

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

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

Sign up for John’s email distribution list, here.

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

DISCLOSURES

News & Analysis at your fingertips.