Dollar Advances to 6
It's happening again. The S&P 500 is parked just below a record high at the same time the Dow Jones FXCM Dollar Index (ticker = USDollar) is tentatively turning a bear trend having closed a six-week high. Has the position of the currency as a 'safe haven of last resort' changed to one of a carry currency? No. This is a reflection of the quality of sentiment we are dealing with. Rather than look at the relationship between benchmark 'risk' gauge and 'safe haven', we can also refer to activity measures on the high-flying equity measure. Volatility already flat-lined recently below 12 percent - a rare occurrence over the past seven years - and this past session's push above 1,890 was forged on one of the lowest readings of volume outside of holidays on record. This has the characteristics of a zombie bull market where complacency and habit dictate progress rather than committed positioning. With Monday's market holiday, a struggle to rekindle momentum behind either a bullish break or bearish reversal should be expected. In the meantime, that may not prevent the dollar from edging out more serious technical levels. The trouble for the Euro, pullback from AUDUSD and GBPUSD, and the risk move on USDJPY may inadvertently forge a bull trend.
Euro: Economic Activity Readings Push ECB Further Towards Stimulus
The Euro's troubles don't end with EURUSD. Against the Japanese Yen, the world's second most liquid currency has turned a reversal despite a positive risk move; while a monetary policy contrast is pushing EURGBP to two-and-a-half year lows. The looming upgrade to the Eurozone stimulus program in two weeks is keeping the currency on a steady trajectory - with a slow leak in rate premium favoring momentum. In this past session, the regional PMI figures added another facet of certainty for the bear. While the figures didn't collapse, they certainly aren't compensating for shortfalls in other areas of the market and economy. Moving forward, a stimulus upgrade will slowly weigh on the Euro. To add a sense of haste to that move, a clear move to a QE-level move or a reversal of capital from the periphery could provide amplitude.
Japanese Yen Crosses Rebound - How Long Does It Last?
The yen crosses are amongst the more sensitive FX pairs to the ebb and flow in general risk trends. Therefore, a rebound for the group as global equities rallied is not necessarily a surprise. Yet, just as there is doubt over the waves of investor interest that will come as the S&P 500 and
British Pound Conviction Wilts as 1.7000 Comes Into View
On the week, the British Pound is up against all of the majors. The rebound in interest rate expectations is sound - it just hasn't developed all at once. Following up on the better CPI readings and the BoE's lean towards a more timely tightening schedule in their minutes, the past session provided the details of the 1Q GDP reading - with notable improvements in private spending. However, like everything else off the docket, the reports breakdown has its misses: like the cooling in investment and the drop in exports. Through yields and forward swaps the
Canadian Dollar Rallying Ahead of Inflation Data
The Canadian dollar was the best performing major on the day despite a disappointing showing on the economic docket - retail sales unexpectedly contracted in March. Where was the currency finding its strength? Monetary policy. The bearings for the Bank of
Emerging Market Index Jumps to 7
Though the swell in risk appetite of late is founded on dubious levels of conviction, that doubt didn't dissuade the highly sensitive emerging market benchmarks from taking advantage. The MSCI Emerging Market ETF jumped a second consecutive day - by 0.7 percent - to top a level last seen in October. Yet, here too, volume seemed to be absent. Amongst the currencies within the class, the performance was notably mixed. The best performer on the day was the Turkey Lira run of 0.7 despite the central bank's decision to cut the benchmark lending rate and the Indian Rupee running 0.6 percent in the aftermath of the election. At the opposite end of the spectrum, the Brazilian Real dropped 0.4 percent despite a drop in the official jobless rate and a modest 0.3 percent slip for the Thai Baht as a military coup unfolded.
Gold and Silver Flagging While Commodities Advance
Conference Board Leading Economic Index (APR)
The Tiger economy continues to face an economic slowdown and an upbeat outcome may support AUD, NZD.
German Gross Domestic Product s.a. (QoQ) (1Q F)
Final estimates of first quarter German GDP are to show QoQ at highest level since 1Q 2012. These figures are final estimates and may do little to prop the Euro.
German Gross Domestic Product w.d.a. (YoY) (1Q F)
German Gross Domestic Product n.s.a. (YoY) (1Q F)
German Private Consumption (1Q)
These indicators are useful for traders to assess the output growth and economic health. With GDP figures on tap it is likely traders will focus on the headline figures for directional cues, but an upbeat outcome may do little to discourage
German Government Spending (1Q)
German Domestic Demand (1Q)
German Exports (1Q)
German IFO - Business Climate (MAY)
German business climate and expectations index are near the highest levels since 2011.
German IFO - Current Assessment (MAY)
German IFO - Expectations (MAY)
Consumer Price Index (MoM) (APR)
Key headline inflation rate is important in contact of BoC monetary policy, but inflation might lack the necessary punch this time around as Canadian dollar traders are seemingly more focused on housing market for a broader outlook regarding the single-currency.
Consumer Price Index (YoY) (APR)
Canada Consumer Price Index Core (MoM) (APR)
Canada Consumer Price Index Core (YoY) (APR)
Releases New Home Sales Revisions
New Home Sales (APR)
New Home Sales (MoM) (APR)
Upcoming Events & Speeches
ECB Publishes 3-Year LTRO Repayment
SUPPORT AND RESISTANCE LEVELS
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CLASSIC SUPPORT AND RESISTANCE
INTRA-DAY PROBABILITY BANDS
The information contained herein is derived from sources we believe to be reliable, but of which we have not independently verified.