Forex - Dollar rallied last week on better economic data and lower stress in financial markets
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Forex News and Events:
The Dollar climbed to five-week peaks against the Euro and three-week highs against the Sterling on Friday as better-than-expected economic data reduced worries about a much sharper slowdown. The Yen gained broadly helped by stress in financial markets on news that General Motors had hefty losses in Q2. That dragged US stocks lower and triggered safe-haven bids for Treasuries.
Friday's data showed that US employers eliminated 51k jobs in July, lower than market expectations for a payrolls decline of 75k. A separate report said US factory activity was unchanged in July, compared with the previous month, but above market forecasts.
On Friday, EurUsd was down 0.07% at 1.5573 after hitting 1.5513 low immediately after the US jobs data, its lowest since June 24th. GbpUsd fell to three-week lows at 1.9727and traded last at 1.9755 down 0.37%. UsdJpy last traded down 0.08% at 107.66. UsdChf rose only 0.06% to 1.0488.
Rising risk aversion amid a drop in US and key European stock markets dragged the Dollar lower against the Yen. Shares of GM plunged more than 7% after the top US carmaker posted a second-quarter loss of $15.5bio much worse than forecast. Also, a rise in crude oil prices hurt the Dollar against the Yen. US crude oil rose 0.87% to 125.29 a barrel as geopolitical concerns fanned supply worries after a top Israeli official said Iran was heading toward a major breakthrough in its nuclear program.
Investors widely expect the Fed's policy-making Federal Open Market Committee (FOMC) to keep its benchmark federal funds rate steady at 2% when it meets on Tuesday.
AudUsd tumbled to a 2-1/2 month low at 0.9302, on speculation that the Reserve Bank of Australia could set the tone for lower interest rates after its policy meeting next week. NzdUsd also slumped to 0.7247, a 10-month low, on deepening concerns over the local financial sector. It was last at 0.7288, down 0.36.
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Today's Key Issues (time in GMT):
00:00 CAD Market Holiday
07:30 CHF August Sentix Index -10 vs -9.30
09:00 EUR June Euro-zone Producer Prices 0.8% vs 1.2% (MoM)
09:00 EUR June Euro-zone Producer Prices 7.9% vs 7.1% (YoY)
12:30 USD June Consumption adjusted 0.5% vs 0.8%
12:30 USD June Core PCE price index 0.2% vs 0.1% (MoM)
12:30 USD June Personal income -0.2% vs 1.9%
14:00 USD June Durable Goods orders revision 0.8% vs 0.8%
14:00 USD June Durable Goods ex-trans revision 2%
14:00 USD June Durable Goods ex-defence revision 0.1%
14:00 USD June Factory orders 0.7% vs 0.6%
14:00 TRY July CPI 0.32% vs -0.36% (MoM)
14:00 TRY July PPI 0.40% vs 0.32% (MoM)
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The Risk Today:
EurUsd Market went close to 1.5500 support last week. Further weakness might undermine the current 3-month uptrend. This may open the 1.5400 – 1.5800 consolidation range. Below, strong support holds 1.5304 13th June low. Key initial resistance holds 1.6000. A break up there would open the way to Trendline resistance 1.6200. Initial support holds 1.5515 Friday low.
GbpUsd Cable broke down last week the short term 1.9800 – 2.0100 trading range. It hit 2.0158 high three weeks ago and 1.9727 last week. Key level holds 2.0100 resistance. On the downside, only a return below 1.9649 might bring again focus on 1.9337 January low and 1.9105 (50% retracement of 1.7049 – 2.1162 advance). Initial support holds 1.9649 July 7th low. Strong support holds 1.9363 20th February and 14th May low.
UsdJpy Last two-week recovery pushed the market up to 108.38 last week. This Dollar rebound put focus on mid-June 108.59 resistance and 110.10 strong resistance (Trendline). Further advance would open the way toward 111.92 early January high. On the downside, a return below 105 may open the way toward 102.73 support and 100 pivot point.
UsdChf Last two-week Dollar strength pushed over 1.0500 last week. Initial resistance holds 1.0523 30th July high. This is confirming the view for a 1.0200 – 1.0600 consolidation range. Renewed weakness below 1.0200 would retest the 1.0000 pivot point and may open the way toward 0.9637 17th March low.
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Resistance and Support:
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EURUSD |
GBPUSD |
USDJPY |
USDCHF |
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1.6200 T |
2.1162 S |
111.92 K |
1.1191 K |
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1.6039 M |
2.0158 M |
110.10 T |
1.0625 T |
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1.6000 K |
2.0100 K |
108.59 S |
1.0523 M |
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1.5590 |
1.9715 |
107.80 |
1.0470 |
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1.5515 M |
1.9800 S |
105.00 P |
1.0013 M |
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1.5304 S |
1.9649 S |
102.73 S |
1.0000 P |
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1.5000 K |
1.9337 T |
100.00 P |
0.9637 K |
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S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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