By Mercaforex
USD:
The USD gained against the EUR and GBP on Thursday as market sentiment continued to show signs of less optimism. The U.S. equity market took a hit when the Existing Home Sales numbers came in below expectations. The figure turned in was 5.10 million compared to the forecast of 5.36 million, and importantly in the minds of investors was below the previous month’s total of 5.25 million. Weekly Unemployment Claims data were released too and produced a better number than expected with an outcome of 530K. However, the housing sector news turned what was an already cautious stock market into a sour one. Today the New Homes Sales numbers will be brought forth and carries an estimate of 442K, which would be better than the last publication. Also Core Durable Goods Orders are on schedule today and carries an anticipated mark of 0.9%.
The USD has made a rather strong move on the GBP this week. However, the greenback while having gained on the EUR it is still near the lower ebb against this currency. The market is trading in a rather disconnected fashion and this is raising eyebrows. Risk appetite in the equity markets continues to be a barometer that must be watched and the results from Wall Street recently have been awkward. The G20 meetings in Pittsburgh are underway and though investors are going to pay attention to the recommendations and agreements that come from the summit, it is also likely that nothing significant from the conference will move the markets today and will only be digested this weekend. Monday will be a quiet day of data from the U.S., which means that traders will be paying direct attention to the New Home Sales numbers today and be keen to see what effect it has. The USD has begun to show relative strength against the GBP in trading and this is likely to be a source of interest today.
EUR:
The EUR fell in trading against the USD on Thursday, but the European currency continues to move at the upper realms against the greenback. The German Ifo Business Climate reading was published yesterday and produced a number of 91.3, which was below the forecast of 92.1. Movement in the EUR was rather restrained and that may be because of the caution that the shadow of this weekend’s upcoming German election is casting. M3 Money Supply statistics will be brought forth today from the European Union and Italian Retail Sales figures will be also. However, it stands to reason that the EUR might find that it trades within a dollar centric fashion going into the weekend. Having made significant gains the past few weeks, traders will try to decipher if the EUR has more gas in the tank against the USD and GBP. The EUR has certainly showed strength, but the real question is why it has gained in value while its economic data continues to be murky likes its counterparts.
GBP:
The Sterling suffered yet another day of diminishing value against both the USD and EUR. The GBP has shown considerable weakness the last few trading sessions and this is getting the attention of traders. There was little in the way of economic data from the U.K. and there will be nothing of significance today. Many British politicians are attending the G20 conference in the U.S. and offering plenty of sound bites for the public. The question that must be asked however is who is listening to Prime Minister Gordon Brown and the Chancellor of the Exchequer Alistair Darling? This because they are seen as ‘lame ducks’ due to their falling popularity on the home front and the likelihood that elections will put a new government in place when the time comes. The Nationwide HPI figures are due on Monday. Today’s trading may continue to find the GBP put under pressure.
JPY:
The JPY moved in a rather strong fashion as volume from the Asian marketplace increased as traders returned in force from their holidays. The JPY gained against the USD as the Asian equity markets turned in a rather poor day across the board. Risk appetite is being called into question among many Asian investors, particularly as the Chinese bourse in Shanghai has seemingly lost its momentum. Gold traded lower on Thursday as the USD gained in strength and the precious metal will have to be watched carefully today if the greenback continues to gain favor going into the weekend. Gold is still within a fairly compact range and its movements though rapid, has not broken free of its recent track record.
Risk Appetite Declines, Safe Haven Trading Resumes As Dollar Rallies
SPX/USD:
The American Market is showing weakness for the first time since August! Will it last? Yesterday we lost almost another 20 points. One thing I have learned over the last few of years of my trading career. Things come down a lot faster than they go up. Just look at how quickly we dropped from 1300 to below 800 last year! Trading yesterday was choppy, but always pushed lower. Many people were taught great trading lesson’s yesterday. If you missed trading the open you may have been chopped up in the consolidation that happened the rest of the day. Support 1039.5, 1028, 1018, 1009.3, 1001.5. Resistance 1051.9, 1056.9, 1058.5, 1061.2.
XAU/USD:
Gold may have topped out temporarily. As the US Dollar shows strength, due to safe haven buying, products that are valued in Dollars must weaken. Yesterday we traded down a mere $30. We can continue to trade lower if the greenback shows strength, and from a technical standpoint we may have a rounded top. This could suggest a further move lower over the next week or so, but it’s very likely we will hold the 989.95 level. A break below could see us try to push down towards the 971 region. Support 989.95, 982.4, 971.75, 961.72. Resistance, 995.57, 1005.2, 1011.5, 1019.65, 1024
GBP/USD:
Here is an example of what can happen when all the market needs is a catalyst to send it lower. Technically the Pound had not been very strong over the last little while, but it had managed to stay within a relatively tight trading channel. Once the USD started to show strength yesterday, the pound came off, hard. We blew past support of 1.6113 and traded all the way to 1.5916. Look for a further push down to 1.58. We may test this area, and if the market is unable to find support then look out below. Support 1.5976, 1.5916, 1.580, 1.5723, 1.5621, 1.5514. Resistance 1.6113, 1.6274, 1.6467, 1.6567
EUR/USD:
Like the rest of the world currencies, the Euro gave back some gains during yesterday’s trading session. Currently it has retraced almost half of the down move, after bouncing off of the 1.4613 support level. Traders will be vigilant over the next few trading sessions with one eye glued to the USD. Support 1.656, 1.4612, 1.4560, 1.4515, 1.4449 Resistance 1.4708, 1.4766, 1.4823, 1.4844
Written by: Michael Deckelbaum, Chief Technical Analyst
USD:
The USD gained against the EUR and GBP on Thursday as market sentiment continued to show signs of less optimism. The U.S. equity market took a hit when the Existing Home Sales numbers came in below expectations. The figure turned in was 5.10 million compared to the forecast of 5.36 million, and importantly in the minds of investors was below the previous month’s total of 5.25 million. Weekly Unemployment Claims data were released too and produced a better number than expected with an outcome of 530K. However, the housing sector news turned what was an already cautious stock market into a sour one. Today the New Homes Sales numbers will be brought forth and carries an estimate of 442K, which would be better than the last publication. Also Core Durable Goods Orders are on schedule today and carries an anticipated mark of 0.9%.
The USD has made a rather strong move on the GBP this week. However, the greenback while having gained on the EUR it is still near the lower ebb against this currency. The market is trading in a rather disconnected fashion and this is raising eyebrows. Risk appetite in the equity markets continues to be a barometer that must be watched and the results from Wall Street recently have been awkward. The G20 meetings in Pittsburgh are underway and though investors are going to pay attention to the recommendations and agreements that come from the summit, it is also likely that nothing significant from the conference will move the markets today and will only be digested this weekend. Monday will be a quiet day of data from the U.S., which means that traders will be paying direct attention to the New Home Sales numbers today and be keen to see what effect it has. The USD has begun to show relative strength against the GBP in trading and this is likely to be a source of interest today.
EUR:
The EUR fell in trading against the USD on Thursday, but the European currency continues to move at the upper realms against the greenback. The German Ifo Business Climate reading was published yesterday and produced a number of 91.3, which was below the forecast of 92.1. Movement in the EUR was rather restrained and that may be because of the caution that the shadow of this weekend’s upcoming German election is casting. M3 Money Supply statistics will be brought forth today from the European Union and Italian Retail Sales figures will be also. However, it stands to reason that the EUR might find that it trades within a dollar centric fashion going into the weekend. Having made significant gains the past few weeks, traders will try to decipher if the EUR has more gas in the tank against the USD and GBP. The EUR has certainly showed strength, but the real question is why it has gained in value while its economic data continues to be murky likes its counterparts.
GBP:
The Sterling suffered yet another day of diminishing value against both the USD and EUR. The GBP has shown considerable weakness the last few trading sessions and this is getting the attention of traders. There was little in the way of economic data from the U.K. and there will be nothing of significance today. Many British politicians are attending the G20 conference in the U.S. and offering plenty of sound bites for the public. The question that must be asked however is who is listening to Prime Minister Gordon Brown and the Chancellor of the Exchequer Alistair Darling? This because they are seen as ‘lame ducks’ due to their falling popularity on the home front and the likelihood that elections will put a new government in place when the time comes. The Nationwide HPI figures are due on Monday. Today’s trading may continue to find the GBP put under pressure.
JPY:
The JPY moved in a rather strong fashion as volume from the Asian marketplace increased as traders returned in force from their holidays. The JPY gained against the USD as the Asian equity markets turned in a rather poor day across the board. Risk appetite is being called into question among many Asian investors, particularly as the Chinese bourse in Shanghai has seemingly lost its momentum. Gold traded lower on Thursday as the USD gained in strength and the precious metal will have to be watched carefully today if the greenback continues to gain favor going into the weekend. Gold is still within a fairly compact range and its movements though rapid, has not broken free of its recent track record.
Risk Appetite Declines, Safe Haven Trading Resumes As Dollar Rallies
SPX/USD:
The American Market is showing weakness for the first time since August! Will it last? Yesterday we lost almost another 20 points. One thing I have learned over the last few of years of my trading career. Things come down a lot faster than they go up. Just look at how quickly we dropped from 1300 to below 800 last year! Trading yesterday was choppy, but always pushed lower. Many people were taught great trading lesson’s yesterday. If you missed trading the open you may have been chopped up in the consolidation that happened the rest of the day. Support 1039.5, 1028, 1018, 1009.3, 1001.5. Resistance 1051.9, 1056.9, 1058.5, 1061.2.
XAU/USD:
Gold may have topped out temporarily. As the US Dollar shows strength, due to safe haven buying, products that are valued in Dollars must weaken. Yesterday we traded down a mere $30. We can continue to trade lower if the greenback shows strength, and from a technical standpoint we may have a rounded top. This could suggest a further move lower over the next week or so, but it’s very likely we will hold the 989.95 level. A break below could see us try to push down towards the 971 region. Support 989.95, 982.4, 971.75, 961.72. Resistance, 995.57, 1005.2, 1011.5, 1019.65, 1024
GBP/USD:
Here is an example of what can happen when all the market needs is a catalyst to send it lower. Technically the Pound had not been very strong over the last little while, but it had managed to stay within a relatively tight trading channel. Once the USD started to show strength yesterday, the pound came off, hard. We blew past support of 1.6113 and traded all the way to 1.5916. Look for a further push down to 1.58. We may test this area, and if the market is unable to find support then look out below. Support 1.5976, 1.5916, 1.580, 1.5723, 1.5621, 1.5514. Resistance 1.6113, 1.6274, 1.6467, 1.6567
EUR/USD:
Like the rest of the world currencies, the Euro gave back some gains during yesterday’s trading session. Currently it has retraced almost half of the down move, after bouncing off of the 1.4613 support level. Traders will be vigilant over the next few trading sessions with one eye glued to the USD. Support 1.656, 1.4612, 1.4560, 1.4515, 1.4449 Resistance 1.4708, 1.4766, 1.4823, 1.4844
Written by: Michael Deckelbaum, Chief Technical Analyst