Currency Summaries (Source : Reuters)
EUR/USD EUR/USD opened NY unchanged vs last night's close at 1.2580, O/N session range 1.2571//1.2614; NY range 1.2559/1.2627, close 1.2610. EZ equity marts closed up 0.96/1.84% (France x Portugal) DAX +1.26%, FTSE +0.83%. US equity marts +0.55/0.8% at the early close. EUR/USD was locked in a tight range overseas, traders content to sit on the sidelines with the US closed for July 4th holiday and ahead of the ECB rate decision on Thursday. Our London options desk note larger than average vanilla option expiries at 1.2600 are drawing price action Options Calendar 1 and in the absence of any controversial EZ headlines should be the deciding factor until Thursday morning.
USD/JPY The general pattern for the yen was one of modest weakness, but the European and US sessions only pushed that nominally. USD/JPY popped briefly into the 79.90 area, but otherwise ranged around 79.80. Thanks to better trading in the risk markets, EUR/JPY reached up to 100.80 and held close, but that was after an initial retracement back to 100.20. GBP/JPY and AUD/JPY showed similar pattern, though the latter proved the best performer, as would be expected in a risk accepting market. Another day in the running range has furthered the narrowing of the USD/JPY Bollingers to the point where they are quite tight on a historical basis. Combined with a single-digit Trend Intensity level, it tells us the market is getting very close to making its next meaningful directional move. Give pattern of higher highs and lows since the June 1 bottom, the bias looks to favor an eventual upside resolution.
GBP/USD Reported UK consumer credit and lending figures were generally better than expected, but construction PMI missed rather significantly. There was little impact on sterling, however. Struggles in the broad markets in the European morning saw the USD rally, which pulled GBP/USD down from highs above 1.5700 to a test of 1.5660. In the US morning, however, that all reversed and by the end of the session cable was back to the upper end of the range. EUR/GBP was mainly range-bound until making a break through 0.8030 in the US morning about the time the IMF suggested above 2% German inflation. GBP/USD has demonstrated by managing to get back to the 1.5700 area following another dip down, even if it hasn't managed to push on toward the June highs. The Bollingers are still narrowing rapidly and Trend Intensity continues to fall, so consolidation remains the major theme for now. We're probably not too far off seeing a break of the ranging, however.
USD/CHF After yesterday's risk rally to 0.9560 today's rally stifled at 0.9563, prices stalled once again ahead of the 200-hr M/A at 0.9577.Momentum has turned negative with US equities closing +0.56/0.79% with an early close for US July 4th holiday.EUR/CHF steady 1.1998/1.2020 with a late downside test at New York fix. Swissy supported by reports of Iran missile test (they claim it can reach Israel) & Iraq car bomb that killed dozens of Shiite pilgrims underpinning CHF. Firm gold also helped (closed $1619.40, +1.42%, USD/CHF closed 0.9524 after lows by 0.9514.
USD/CAD USD/CAD opened Noram marts 1.0150/55 -15 pips vs yesterday's close; O/N range 1.0140/71, Noram range 1.0121/67; close 1.0124. Cross currency flows kept the Loonie in the corralled, model sales of EUR/CAD knocked pair down from 1.2800 to 1.2735, closed 1.2760/65. CAD/JPY sales knocked pair down from 78.70 to 78.40 but rally in US equities took pair back to 78.90 paid, close 78.80. US equity marts with an early close, +0.56/0.79%, TSX +2.14% at the same time, 11,844.76 boosted by surging commodity complex; WTC oil +4.45% $87.50, Brent +3.5% $100.75. Mid-East tensions, Norwegian oil workers strike & Fed QE prospects driving prices, gold +1.45% $1620.0, copper +2.0% $3.5355 lb.
AUD/USD AUD/USD traded the NY session within tight ranges once again. The pair opened the session consolidating close to its recent trend highs as the AUD continues to get bullish signals. In the o/n session the RBA was less dovish than anticipated and a second tier housing number tore the cover off the ball. The NY session saw commodities break out to new highs for the recent rally. Futures on oil & copper were up 4.5% and 2.0% respectively. Gold rallied $25 and the CRB was up 2.75%. Reaction from FX was limited though and AUD/USD limped higher to trade just ahead of a reported 1.0300 barrier. Market chatter is of decent stops above the 1.0300 level. The pair may need further rallies in equities and commodities for a break above 1.0300. Technically the picture looks good. The pair looks set to close above the 100 & 200 DMAs and trend line support off the June lows remains intact. Daily RSI and Stoch momentum studies are stretched so a pullback may be in the cards.
NZD/USD The kiwi was weaker through much of the European session, seeing NZD/USD retrace back to the 0.8010 area and AUD/NZD extend its gains to a peak above 1.2790. As risk markets developed strength, however, the NZD made a turn. NZD/USD rallied fairly quickly back up toward the prior day highs near 0.8060 and the cross retraced back to the 1.2765 area. Both moves did see a bit of reversal heading into the US close, however. The push on to a new high in NZD/USD keeps the uptrend ticking over and we're seeing Trend Intensity moving higher in an uptrend reading as well. The bottom of the March/April consolidation remains important resistance however, and TI is already at a high enough reading to suggest limits to how far the market may be able to go. RSI is also getting on toward overbought. That suggests caution moving ahead.
LATAM Local equity marts higher, Bovespa +2.23%, IPSA (CL) +0.21% IPC (MX) +0.74%, Merval (AR) +1.8%, IGBC (CO) +1.56% IGRA (PE) +0.64%. LATAM FX vs USD mixed - BRL -0.66% 1.9975, CLP +1.03% 494.90, MXN +0.24% 13.30750, COP +0.39% 1768.8. BRL sold off because comments from BACEN director govt. ready to buy USD and favour weaker BRL to boost exports after soft Industrial production data today (0.9% May (f/c -0.7%) y-on-y -4.3% (f/c -3.3%) FIPE +0.23%. Gold closed +1.6% $1621.9; silver +3.2% $28.35, WTC oil +4.5% $87.57, Brent +3.5% $100.85, copper +1.9% $3.5300 lb.
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