Forex Blog

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: buy.

EUR/USD currency pair went down slowly on Forex today after the news releases regarding Treasury International Capital and Consumer Price Index came out in U.S. EUR/USD opened at 1.5911 and quickly formed an upward spike with a highest level at 1.5948, currently it’s trading at 1.5861.

CPI gained 1.1% in June after 0.6% advance in May. The median analysts’ forecast for this month increase of the CPI was 0.7%.

Net foreign purchases of the long-term securities were $67 billion in May down from $111.9 billion in April (revised down from $115.1 billion). It was still above the average forecast of $65 billion.

Industrial production and capacity utilization improved in June. Production went up 0.5% after being down by 0.2% in May; th forecast was 0.2% growth. Capacity utilization increased from 79.4% to 77.9%, while it was expected to remain unchanged.

Crude oil inventories gained 3 million barrels last week but they are still near the lower boundary of
the average range for this time of year, according to Energy Information Administration.

EUR/USD trend: buy.
GBP/USD trend: buy.
USD/JPY trend: sell.
EUR/JPY trend: buy.

The EUR/USD currency pair declined today before and after the macroeconomic releases that were scheduled for today and even after the speech by the Fed’s Ben Bernanke. In his speech Bernanke said that he will prolong the emergency-loan program for the banks into 2009. This will probably mean less interest rate hikes as it would be hard for the FOMC to raise rate significantly and provide the liquidity to the failing banks simultaneously.

Pending home sales index based on the May data declined from 88.9% to 84.7%, while a moderate decline by 2.8% has been expected. Last time this index showed 7.1% growth (revised up from 6.3%).

Wholesale inventories climbed up 0.8% in May — better than 0.6% forecast, but worse than the 1.3% growth in April.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: hold.

EUR/USD fell sharply today paring the weekly gain as the employment statistics in U.S. was released. Not only employment figures disappointed market participants, but also ISM services index declined faster than expected in June. But for some strange reason that supported the U.S. dollar and it showed the fastest daily gain since April 24. EUR/USD declined from 1.5890 to 1.5695.

Nonfarm payrolls lost 62k in June, that loss followed the same decline in May (revised up from 49k loss) and was worse than 60k of the forecast. Unemployment rate remained at 5.5%, while it was expected to fall to 5.4%.

ISM services index lost 3.5% in June and is now at 48.2%. It was expected to go down to 51.0% only. The current decline in this index followed decline in May, which indicates a real stagnation in the non-manufacturing sector.

EUR/USD grew today to its monthly maximum and remained well above the yesterday’s close level after the bad data on employment was released in U.S. today. Other economic releases failed to support the dollar today.

ADP employment report surprised markets with 79k drop in jobs in June, whereas the forecast was a 40k decline. This was the first drop in employment since February according to ADP.

Factory orders rose in May by 0.6%, better than the 0.5% growth in the consensus forecast, but below the April’s 1.3% growth (revised up from 1.1%). Manufacturing remains the only sector of the economy unaffected by the ongoing crisis.

Crude oil inventories decreased by 2 million barrels last week and they are still near the lower boundary of the average range for this time of year.

EUR/USD trend: sell.
GBP/USD trend: sell.
USD/JPY trend: buy.
EUR/JPY trend: buy.

EUR/USD corrected slightly today after fundamental data both from U.S. and Eurozone showed more support for the dollar rather than for the euro. Important consumer spending and income data arrived from U.S. today, while Eurozone released its business and consumer survey. EUR/USD fell from 1.5750 to 1.5742 today.

Personal income and outlays report showed 1.9% and 0.8% growth in May, respectively. That’s above 0.3% and 0.4% growth in April and 0.4% and 0.7% forecasts for May. Such good values for this important economic indicator may signal that the U.S. economy is recovering from the recent financial crisis.

Eurozone consumer confidence indicator went down in June from -15 to -17, while business climate indicator decreased from 0.58 to 0.14 the same month.

EUR/USD didn’t change from its upward trend today after the final Q1 GDP data was released. The currency pair continued to grow for a third day in a row and advanced today from 1.5664 to 1.5737 after the most important fundamental reports for today were released in U.S.

GDP in the first quarter of 2008 advanced at an annual rate of 1.0 percent — higher than 0.9 percent growth reported in the preliminary report and it has met the analysts’ expectations.

Initial jobless claims didn’t change last week — they remained at the revised value of 384k (revised up from 381k). They were expected to fall to 375k last week.

Existing home sales rose unexpectedly in May — to 4.99 million (annual rate) from April’s 4.89 million. They were expected to rise to 4.95 million.