Forex - USD heads for records weekly loss versus Euro as Supply rises
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Forex News and Events:
The USD remained the biggest loser across the board yesterday following the Fed’s quantitative easing announcement on last Wednesday. The release of US economic data on Thursday morning was not very optimistic either. Labor Department numbers were mixed, but global sentiment of the results is decidedly disappointing. While Initial Jobless Claims decreased by 12,000 to 646,000, Continuing Jobless Claims rose drastically by 185,000 to 5,473,000 during the week ending March 7, the highest since record keeping began in 1967. Meanwhile, the Conference Board's leading economic index fell in February at a rate of 0.4 percent after rising in January. A breakdown of the report shows that the decline was led by the average workweek, jobless claims, stock prices, and consumer expectations. On the other hand, consumer goods orders, pace of deliveries, nondefense capital goods orders (business investment), and building permits all registered small improvements of less than 0.1 percent. With Japan enjoying a national holiday, the Asian session was extremely subdued. EUR/USD and GBP/USD edged down thanks to option related selling but both pairs slowly recovered to be little changed at the time of writing. We hear reports of offers just above 1.3700 with stops at 1.3760 while bids are reported near 1.3600 with stops just below. A UK press story reporting that the Bank of England’s Dale thinks that the UK may be over the worst of the recession and could begin to recover in the second half of 2009 had little effect on the Pound. Opinions count for nothing and, after all the bad press the UK has received in recent times; it will take a lot more to change the market’s perception. No US data is due today so it could possibly be a lackluster end to the week.
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Today's Key Issues (time in GMT):
11:00 EUR Italia Unemployment Rate 7.00% vs. 6.70%
11:00 EUR Euro-Zone Ind. Prod. sa (MoM) -4.00% vs. -2.60%
11:00 EUR Euro-Zone Ind. Prod. wda (YoY) -15.50% vs. -12.00%
13:30 CAD New Motor Vehicle Sales MoM 6.00% vs. -14.8%
13:30 CAD Retail Sales MoM 1.00% vs. -5.40%
13:30 CAD Retail Sales Less Autos MoM 0.40% -3.20%
17:00 USD Fed’s Chairman Bernanke speaks on Panel at Convention in Phoenix
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The Risk Today:
EurUsd Dollar's weakness increases against other currencies and the Euro gained more than 3 figures on yesterday; breaking above resistance at 1.3590 is likely to head higher within the ongoing range in play since August. Resistance near the middle of this range is at 1.3850/3900 and acts as a strong target.
GbpUsd Cable continued its bullish momentum on Thursday as well. It broke the 1.4460 resistance level to reach 1.4593. A close above the top of the daily cloud at 1.4615 would confirm signs of US dollar weakness elsewhere and imply gains to 1.50 and 1.57 into next month.
UsdJpy USD/JPY rebounded from trendline support at 93.70 yesterday as this held on the initial time of asking. Ideally, we expect the market to stall against 93.40/70 as the JPY starts to weaken further on the crosses.
UsdChf Yesterday's decline took the pair to the initial target at 1.1165 before rebounding to the upside in correctional movements to reach 1.1355.
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Resistance and Support:
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EURUSD |
GBPUSD |
USDJPY |
USDCHF |
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1.3965 S |
1.4875 S |
98.35 S |
1.1675 M |
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1.3900 S |
1.4715 S |
96.60 S |
1.1545 K |
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1.3795 M |
1.4665 S |
95.90 S |
1.1460 S |
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1.3686 |
1.4540 |
94.52 |
1.1183 |
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1.3415 S |
1.4335 |
93.40 M |
1.1085 M |
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1.3325 M |
1.4165 M |
92.50 K |
1.0980 M |
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1.3275 S |
1.4070 M |
91.90 S |
1.0900 S |
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S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot |
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