Forex - Market players are looking for clues on the Dollar’s direction
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Forex News and Events:
The dollar was steady on Monday with markets holiday in US and UK. Activity is expected to pick up as investors return from a long weekend, with market players looking to oil prices and stocks for clues on the Dollar's near-term direction. Also, investors are expecting economic data and speeches by Federal Reserve officials to provide a clearer picture of the deteriorating US economy.
Traders said further gains in Oil prices would likely hurt the Dollar. But with Oil prices vacillating near record highs, traders also saw the possibility that profit-taking could lead to a sharp fall in prices, which in turn could push the Dollar up. Crude oil rose about 20% percent in May to record levels $135.09 a barrel. This is putting doubt over the ability of US consumers and businesses to weather the credit- and housing market-led economic downturn and prevent the economy from sliding into full-blown recession.
EurUsd was unchanged at 1.5780. UsdJpy was up 0.21% at 103.40. UsdChf was 0.05% lower at 1.0238 while GbpUsd rose 0.03% at 1.9815.
Investors look to a raft of US data and speeches from top Fed officials, including Chairman Ben Bernanke on Thursday for more clues about the direction of interest rates. Among the main data points this week will be the flash estimate for May euro zone CPI on Friday. Data to watch today includes the Conference Board's May consumer confidence and US New Home Sales for April.
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Today's Key Issues (time in GMT):
14:00 USD May Consumer Confidence 60 vs 62.3
14:00 USD April New Home Sales 520k vs 526k
14:00 USD Richmond Fed Manufacturing index 1 vs 0
15:50 USD Fed’s Yellen speaks on Economy / Policy, San Francisco
21:00 USD Weekly ABC/Wash Post Consumer Confidence -49 vs -49
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The Risk Today:
EurUsd Euro confirmed new uptrend last week. Market could now return up to 1.6000 Pivot point resistance ahead of key resistance 1.6200 market target. On downside, only a return below previous week 1.5400 - 1.5600 trading range would open the way to 1.5000 psychological key level before 1.4500 pivot point. Support holds 1.5693 Thursday low. Initial support holds 1.5697 Friday low.
GbpUsd Cable broke up the upper Trendline resistance of one-month downtrend 2.0398 – 1.9364 last Thursday. This move over 1.9720 may reopen the way up to 1.9800 and 2.0000 psychological level. Actual trading range is 1.9600 – 1.9800. On the downside, a reversal below 1.9600 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Strong support holds 1.9363 20th February and 14th May low.
UsdJpy Recent 1 ½-month uptrend found resistance around 105. Market broke last week the lower Trendline support. This recent profit taking on 105 might send the market back down to 100 – 104 consolidation trading range. Minor support holds 102.58 May 9th low. Renewed strength over 105 would put 110.10 strong resistance (Trendline) into focus and mid January double top ahead of 111.92 early January high.
UsdChf Market hit 1.0625 two-month high on May 8th. Last week, it broke down 1.0400-1.0600 trading range. This move would open the way down to 1.0200 and maybe toward 0.9639 17th March low. Early January double top 1.1191 marks strong resistance. Initial resistance holds 1.0625 May 8th high. Initial support holds 1.0216 Friday low.
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Resistance and Support:
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EURUSD |
GBPUSD |
USDJPY |
USDCHF |
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1.6200 T |
2.0447 S |
111.92 K |
1.1191 K |
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1.6000 K |
2.0100 P |
110.10 T |
1.0625 T |
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1.5884 M |
1.9800 S |
105.70 M |
1.0582 M |
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1.5755 |
1.9780 |
103.95 |
1.0275 |
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1.5680 M |
1.9363 T |
102.60 M |
1.0302 M |
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1.5000 K |
1.9337 S |
100.00 P |
1.0200 S |
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1.4500 P |
1.9105 K |
95.74 K |
0.9637 K |
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S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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