Forex Day Trading Blog

FX Market Summary 06-11-2014: Euro Struggling To Recover

June 11th, 2014

The Euro was unable to make a significant recovery on Wednesday as underlying yeld pressures remained a negative influence. Expectations that the Bank of Japan will hold policy steady this week with the potential for an upgrading of the economic assessment helped underpin the yen and US bond yields dipped slightly lower. The Japanese currency was broadly resilient with USD/JPY unable to gain any traction. Read the rest of this entry »

FX Market Summary 06-10-2014: Job Hopes Underpin Dollar

June 10th, 2014

The Euro came under fresh selling pressure on Tuesday with the dollar taking advantage in Europe, although struggling to make much headway elsewhere.

Japan’s Nikkei index dipped lower during the day which curbed yen selling while there was a weak reading for the domestic services-sector data. There was no sustained impact from Chinese data with the latest inflation releases slightly stronger than expected and USD/JPY dipped to the 102.30 area. Read the rest of this entry »

FX Market Summary 06-09-2014: Carry Trades Undermine Euro

June 9th, 2014

Trading conditions were more lively than usual on the Monday following a US employment release with the dollar gaining fresh overall support. There were some potentially significant data releases during the Asian session on Monday, although the overall impact was limited. A stronger than expected Chinese trade surplus helped underpin risk conditions which also supprted the Australian dollar. A prominent investment house also raised its forecasts for the currency and AUD/USD moved above the 0.9350 level.

There was a small upward revision to the first-quarter Japanese data while there was a slightly weaker than expected current account surplus for the month with USD/JPY consolidating near 102.50.

The latest CFTC positioning data recorded a further increase in speculative dollar longs to the largest level since early March and the short Euro position doubled which will maintain the potential for further short covering, although markets are unsure how much of this had already been completed following the ECB rate decision.

The Sentix investor confidence index was significantly weaker than expected with a decline to 8.5 for June from 12.8 previously which was surprising and unsettling given the assumption that underlying growth conditions were improving. There was a further shift in Euro-zone peripheral bond yields as Spanish 10-year rates, for example, declined to below equivalent US rates for the first time in over four years. There was increased speculation that the Euro would be used as a global funding currency and this was important in pushing the currency weaker.

Regional Fed President Bullard was generally optimistic surrounding the economic outlook with expectations that unemployment would fall below the 6.0% level later this year. He suggested some re-calibration of monetary policy was possible next year and there was some response in US yields with 10-year yields moving slightly higher to around 2.62%.

After an early failure to break above 1.3670, there was fresh selling and a move to test support below 1.36 early in US trading with the dollar maintaining a generally firm tone. GBP/USD was unable to break resistance in the 1.6840 region and dipped to test support below 1.6800. USD/JPY continued to hit resistance above 102.50 as the yen gained support on the crosses while AUD/USD dipped back below 0.9350.

FX Market Summary 06-06-2014: Dollar Resilient After Payrolls

June 6th, 2014

Following the sharp EUR/USD rebound from 1.3500 lows on Thursday to a peak above 1.3650, there was inevitably unease over selling the Euro aggressively in Europe on Friday with markets wary over the risk of a further short squeeze.

There was also trepidation ahead of the latest monthly US employment data due early in the New York session given the potential for high volatility. The latest UK trade deficit was worse than expected, but the impact was very limited, especially as a large chunk of oil export revenue was missing from the data release. Read the rest of this entry »

FX Market Summary 06-05-2014: ECB Uncharted Territory

June 5th, 2014

After a sharp sell-off in early US trading on Thursday, the Euro proved resilient as selling momentum faded. Some early European data releases caused a flurry of excitement with stronger than expected readings for German factory orders and the UK Halifax house-price index. The Halifax data was striking with a 3.9% monthly increase, although this reflected a correction from weakness in previous months and the annual increase was around 9.0%. Read the rest of this entry »