Talking Points:
- US Dollar corrects lower after Friday’s surge in the wake of firm CPI data
- Commodity currencies rise with S&P 500 futures as risk appetite recovers
- Overnight trends likely to carry forward but lasting follow-through unlikely
The US Dollar traded broadly lower overnight in a move that looked to be corrective following the surge triggered by better-than-expected CPI data on Friday. The yields- and sentiment-sensitive Australian, Canadian and New Zealand Dollars outperformed as S&P 500 futures rose and Treasury bond yields edged lower, seemingly reflecting moderation in the “hawkish Fed” narrative.
A quiet economic calendar in European and US trading hours suggests Asia-session trends may find few barriers to continuation. Significant follow-through seems unlikely however, with traders probably unwilling to commit to a firm directional bias ahead of this week’s pivotal monetary policy announcements from the Bank of Japan and the Federal Reserve.
Losing money trading in the FX market? This might be why.
Asia Session
| GMT | CCY | EVENT | ACT | EXP | PREV |
|---|---|---|---|---|---|
| 22:00 | NZD | Westpac Consumer Confidence (3Q) | 108 | - | 106 |
| 22:30 | NZD | Performance Services Index (AUG) | 57.9 | - | 54.5 |
| 23:01 | GBP | Rightmove House Prices (MoM) (SEP) | 0.7% | - | -1.2% |
| 23:01 | GBP | Rightmove House Prices (YoY) (SEP) | 4.0% | - | 4.1% |
| 01:30 | CNY | China August Property Prices | - | - | - |
European Session
| GMT | CCY | EVENT | EXP | PREV | IMPACT | |
|---|---|---|---|---|---|---|
| 08:00 | EUR | Current Account SA (JUL) | - | 28.2b | Low | |
| 08:00 | EUR | Current Account NSA (JUL) | - | 37.6b | Low | |
| 08:00 | CHF | Total Sight Deposits (SEP 16) | - | 515.8b | Low | |
| 08:00 | CHF | Domestic Sight Deposits (SEP 16) | - | 438.6b | Low | |
| 09:00 | EUR | Eurozone Construction Output (MoM) (JUL) | - | 0.0% | Low | |
| 09:00 | EUR | Eurozone Construction Output (YoY) (JUL) | - | 0.6% | Low |
Critical Levels
| CCY | Supp 3 | Supp 2 | Supp 1 | Pivot Point | Res 1 | Res 2 | Res 3 |
|---|---|---|---|---|---|---|---|
| EUR/USD | 1.0985 | 1.1085 | 1.1120 | 1.1185 | 1.1220 | 1.1285 | 1.1385 |
| GBP/USD | 1.2583 | 1.2833 | 1.2917 | 1.3083 | 1.3167 | 1.3333 | 1.3583 |
--- Written by Ilya Spivak, Currency Strategist for DailyFX.com
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