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
Wall Street
Mixed
Gold
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
GBP/USD
Bullish
USD/JPY
Bullish
More View more
Real Time News
  • Japan compiles new stimulus package of 117.1 trillion #Yen, new spending in second extra budget is 31.9 trillion Yen -BBG citing relevant document
  • Emerging market currencies haven’t been treated equally by the effects of global contagion, even if most have suffered to some degree. However withdrawal of investment flows could hit them all. Get your market update from @DavidCottleFX here:https://t.co/QzNoNYgMgP https://t.co/jTtYhKosIa
  • China's #Yuan falls 0.28% to 7.1560/USD which is the weakest since September 2019 -BBG
  • Silver has been beaten handily by gold in the rush to haven assets inspired by the contagion. However, the gold/silver ratio was rising steadily before this crisis and will probably continue to do so. Get your #silver market update from @DavidCottleFX here:https://t.co/00DiZn6XZS https://t.co/Ep6p4HgiAU
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Gold: -0.01% Silver: -0.28% Oil - US Crude: -1.25% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/uGnOx2D3QE
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇯🇵JPY: 0.05% 🇨🇭CHF: -0.08% 🇨🇦CAD: -0.10% 🇪🇺EUR: -0.16% 🇳🇿NZD: -0.17% 🇦🇺AUD: -0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/1fVY4dfYMN
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.52%, while traders in US 500 are at opposite extremes with 76.00%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/HZ4bR3qFl2
  • Hey there traders, if you missed this week's session on IGCS where I discussed the #SP500, #FTSE100 and #CAC40, check out the recording on YouTube here - https://t.co/CJhhtY5WDJ
  • RBNZ Governor Orr: Is 'early days' for business lending schemes, expects schemes to be used more in coming months. Some payments from schemes put into bank deposits -BBG
  • Heads Up:🇨🇳 Industrial Profits (YTD) YoY due at 01:30 GMT (15min) Previous: -36.7% https://www.dailyfx.com/economic-calendar#2020-05-27
Dollar Rebound Attempts to Revive Trend as Fed Minutes Massage Rate Speculation

Dollar Rebound Attempts to Revive Trend as Fed Minutes Massage Rate Speculation

2015-04-08 05:17:00
John Kicklighter, Chief Strategist
Share:

Talking Points:

  • Dollar Rebound Attempts to Revive Trend as Fed Minutes Massage Rate Speculation
  • Euro: Confusion Over Greece Situation Leaves Results in QE Complacency
  • Australian Dollar Rally Limited After RBA Leaves Rate Unchanged

Dollar Rebound Attempts to Revive Trend as Fed Minutes Massage Rate Speculation

The Dollar was thoroughly trounced Friday after the severe miss for March nonfarm payrolls. That said, it seems low liquidity holiday conditions are the best time to receive bad news. Since last week’s nasty spill pressured the Greenback to troubling levels – a nine-month channel floor for USDollar, 1.1000 for EURUSD and 1.5000 for GBPUSD amongst others – the currency has muscled a modest recovery. It is just enough of a rebound for the benchmark to move bulls away from the ledge, but not enough to suggest they will be unobstructed in a return to 11-year highs. Like the S&P 500’s bullish drift in its exceptionally deliberate channel from the beginning of 2013, the Dollar is finding some considerable support in the comfort of status quo. It is far more taxing on speculators to reverse a well-established and exploitable trend than it is maintain it.

From a fundamental perspective, the US currency isn’t without support for its bullish coast. Despite a trimmed view of its hawkish lean, the Fed is still well ahead of its major counterparts on the monetary policy scales. Yet, at some point, a moderation can eat into the currency’s premium and send it to a deeper correction. As of today, Fed Fund futures are not fully pricing in a rate hike by the central bank until January 2016. Technically, this measure of policy benchmarking was already trading at a discount to the significantly more hawkish lean of the Greenback itself, but the divergence is unlikely to continue to grow. A June hike – the earliest analysts and primary dealers believe a first move would be realized – is looking less likely after last week’s labor report. Should further updates reinforce a deferred timeframe for the first move (whether July, September and especially later), the Dollar will find itself rebalancing. Ahead, we will have a few items to weigh for timing. The Fed’s Powell and Dudley are set to speak on monetary policy and the FOMC minutes from March is due.

Euro: Confusion Over Greece Situation Leaves Results in QE Complacency

Does Greece have enough funding to cover its upcoming obligations Thursday (€458 million IMF loan repayment) or not? It isn’t clear. We have seen plenty of unattributed remarks from Greek officials channeled through the financial media and market participants are quick to weigh in on the financial situation. This is what happens when there isn’t a consistent communication plan between Greece and its creditors, and when the market is increasingly skeptical that the situation will end well. This past session, the Greek deputy finance minister revived the German reparations claim (with a figure of €279 billion) which will go nowhere and instead comes off – if an official position of the government – as a last ditch effort to cover a failing negotiation. Ahead, Prime Minister Tsipras meets with Russia’s Putin which can prove very provocative.

Australian Dollar Rally Limited After RBA Leaves Rate Unchanged

Heading into Tuesday morning’s RBA rate decision, the market pegged a 75 percent probability that the central bank would follow up on February’s easing with another 25bp cut to a 2.00 percent benchmark. Given that level of speculation and the tumble from the Aussie dollar in preceding week, the central bank’s decision to hold necessitated some speculative adjustment. The Aussie’s rally was broad, but it is lacking for gusto. The statement makes it look like a deferred easing, not an impossible one. And, a ‘no change’ policy isn’t an active outcome.

British Pound Heartened by PMIs but BoE Warning Echoes

On the data side, the British Pound’s fundamental bearing seemed to improve this past session. The UK’s Composite PMI reading for March rose sharply to a 7-month high. Given the economy is one of the more robust in the developed world and the BoE is still in second place for returning to rate hikes (seen as March 2016); data like this could help shift the 10-month, nearly 3,000-pip GBPUSD tumble. Yet, the market refuses to pay the BoE as much hawkish speculation as the Fed. Meanwhile the central bank has repeated its warning of financial risks.

Japanese Yen Little Moved by BoJ Decision to Keep Unprecedented QQE Program In Place

The Bank of Japan deliberated on monetary policy this morning and there were no significant surprises. The group maintained the pace of its QQE program – an ¥80 trillion increase in the money base – in an 8-1 vote that once again finds Kiuchi calling for a shift to a ¥45 trillion target. Since the introduction of the BoJ’s stimulus program back on April 4, 2013, its balance sheet has doubled to ¥322.6 trillion. This effort competes with the ECB for girth of active easing programs, but appetite for further expansion has certainly waned over the months.

Emerging Market Benchmark Stalls After Hitting 2015 High, Ruble Slowly Gains

After its surge these past few weeks, the Emerging Markets have taken the top spot for 2015 performance among the most common ‘risk assets’. The MSCI ETF has rallied as much as 6.7 percent from its March 26 low and moved on to set highs last seen in mid-December. That said, conviction seems to be flagging the move. Volume has dropped as new highs have been reached. Similar hesitation is showing through in EM currencies. The Russian Ruble however, is attempting to maintain its slow advance, up 0.8 percent versus the USD this past session.

Gold Advance Losing Momentum and Volume

Gold is attempting to extend its rebound from its March swing low at $1,142 to its fourth week of advance. Yet, despite crossing a few noteworthy levels, the conviction behind the move seems to be drying up the further the metal progresses. On the one hand, we learned from the COT figures that net speculative futures interest posted its biggest increase in long exposure in nine weeks (25,738 contracts). On the other, volume behind futures has steadily declined with the April extension – Tuesday marked the lowest volume in 2015 – while ETF holdings of the commodity has dropped to a January low on a 3.8 percent purge from the February 24 peak. If the Dollar sacrifices itself with a plunge, gold bulls may find their cause refreshed. Otherwise, this is looking like a familiar pattern of reservation for the market.

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

ECONOMIC DATA

GMT

Currency

Release

Survey

Previous

Comments

23:01

GBP

BRC Shop Price Index (YoY) (MAR)

-1.7%

Inflation is currently below the BOE’s inflation target of 2% so far this year. Index contracted by 2.1%, the largest on record.

23:30

AUD

ANZ Roy Morgan Weekly Confidence (Apr 5)

112.3

Due to weakness in the resource sector caused by commodity prices declining, RBA is relying on the non-resource sector.

23:50

JPY

Trade Balance (FEB)

-¥239.9B

-¥864.2B

Trade deficit was lower than expected. Japan’s data has been underperforming expec as indicated by Citi Japan Economic Surprise Index.

23:50

JPY

BoP Current Account Balance (FEB)

¥1440.1B

¥61.4B

3:36

JPY

BOJ Annual Rise in Monetary Base (Apr 8)

¥80T

¥80T

BOJ says that QQE will continue until inflation is at “2% stable”.

5:00

JPY

Eco Watchers Survey Outlook (MAR)

53.5

53.2

Both measures have been rising since November 2014.

5:00

JPY

Eco Watchers Survey Current (MAR)

50.5

50.1

6:00

EUR

Factory Orders (MoM) (FEB)

1.5%

-3.9%

Factory orders on a YoY basis is trending lower since January 2014.

6:00

EUR

Factory Orders (YoY) (FEB)

0.5%

-0.1%

7:15

CHF

CPI EU Harmonized (YoY) (Mar)

-0.9%

-0.4%

The inflation rate has been anemic since 2014. Slowdown in the EU, Switzerland’s biggest export market, has weighing on Swiss economic growth.

7:15

CHF

CPI (YoY) (MAR)

-1.1%

-0.8%

7:30

EUR

Markit Germany Construction PMI (Mar)

53.1

Attention will most likely be focused on the Greek debt auction and April 9th payment.

8:10

EUR

Markit Eurozone Retail Sales PMI (MAR)

46.4

Retail PMI in the EU has been trending lower in 2014. However, EU economic data has been recently outperforming expectations as indicated by the Citi Economic Surprise Index.

8:10

EUR

Markit Germany Retail PMI (MAR)

51.5

8:10

EUR

Markit France Retail PMI (MAR)

43.6

9:00

EUR

Retail Sales (YoY) (FEB)

2.8%

3.7%

The previous figure’s increase in retail sales on a YoY basis was the biggest since Aug 2005.

9:00

EUR

Retail Sales (MoM) (FEB)

-0.2%

1.1%

11:00

USD

MBA Mortgage Applications (Apr 3)

4.6%

Data from the housing sector has been underperforming economists’ expectations recently.

GMT

Currency

Upcoming Events & Speeches

3:00

JPY

Bank of Japan Policy Statement/Kuroda Press Conference

9:00

EUR

Greece to Sell EUR875Mln 178 Day Bills

12:00

USD

Fed’s Powell Speaks on Monetary Policy in New York

13:30

USD

Fed’s Dudley Speaks on Monetary Policy in New York

18:00

USD

Fed Releases Minutes of March 17-18 Meeting

17:00

USD

US Sells 21Bln 10 Year Notes

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

16.5000

2.7500

13.8500

7.8165

1.4275

Resist 2

9.3300

7.3650

8.5270

Resist 1

16.0000

2.7000

12.6500

7.8075

1.3935

Resist 1

8.7400

7.1000

8.4735

Spot

15.0237

2.5896

11.9490

7.7527

1.3582

Spot

8.6351

6.8761

7.9986

Support 1

14.5000

2.3580

11.3500

7.7490

1.3425

Support 1

8.2675

6.4725

7.8360

Support 2

13.6800

2.2850

10.8500

7.7450

1.3230

Support 2

7.8150

6.3325

7.2945

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

1.1001

1.5024

120.84

0.9715

1.2692

0.7676

0.7606

131.56

1219.86

Res 2

1.0968

1.4977

120.55

0.9686

1.2659

0.7651

0.7581

131.19

1214.83

Res 1

1.0935

1.4930

120.25

0.9657

1.2626

0.7627

0.7555

130.81

1209.80

Spot

1.0869

1.4836

119.67

0.9599

1.2561

0.7578

0.7504

130.07

1199.75

Supp 1

1.0803

1.4742

119.09

0.9541

1.2496

0.7529

0.7453

129.33

1189.70

Supp 2

1.0770

1.4695

118.79

0.9512

1.2463

0.7505

0.7427

128.95

1184.67

Supp 3

1.0737

1.4648

118.50

0.9483

1.2430

0.7480

0.7402

128.58

1179.64

--- 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.

The information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified. Forex Capital Markets, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials, nor shall it be liable for damages arising out of any person’s reliance upon this information. Forex Capital Markets, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

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

DISCLOSURES

News & Analysis at your fingertips.