After quiet trading day, traders may look to BUY Gold, Oil, or Silver today.
- After quiet trading day, traders may look to BUY Gold, Oil, or Silver today.
- Consumer Confidence on tap today.
The US Market was closed for holidays on Monday and market liquidity was very low. Today , the Conference Board is expected to release the results of its survey about Consumer Confidence. Consumer Confidence has been a major focus for economists these days, as it reflects consumer behavior and the effect it has on inflation and growth. The market expects a slight improvement to 105 in comparison to the previous 104 of last month. A stronger than expected figure will likely strengthen the USD and may take this pair under the 1.3400 against the EUR for the first time in almost 2 months .
Tomorrow, expect the release of the minutes from the latest Fed meeting on May the 9th. The Fed kept rates at 5.25 % and the market will closely read the statement for signals about an upcoming rate cut. It's very important to watch the balance between the risk for high inflation and the risk for declining economic growth, trying to find a clue where the rates are going in the US.
Yesterday, Monday, The European markets were closed due to a holiday, Whit Day, as was the case in the US, for Memorial Day. As such, market liquidity was very low. Despite the fact that the majority of forex players were away form their desks, the forex market remained open and as always, interesting.
The EUR weakened against the dollar after mixed data released in the Euro zone. French consumer spending came in below expectations dropping to -0.3 percent with CPI in Germany coming in moderately and GFK consumer confidence releasing better-than-expected at 7.3 percent. In the short term as it looks, the EUR/USD is going to move closer to the 1.34 level.
Yesterday , a day that most of the major markets were closed for holiday, the JPY was up on the GBP and stable against the USD and EUR. The Japanese currency has been trading near record lows and despite its recent revaluation, against the American Dollar it looks the JPY will remain pressured. It looks as though the JPY will keep tapering down against the dollar and Euro specially after Japan's CPI released in line with expectations at 0.0% headline and -0.1% core and a serious correction is not expected in the short term. The JPY has fallen 4%against the EUR and 2.2% versus the USD this year due to the fact that many investors borrow yen in order to buy higher-yielding assets overseas, which is called a "carry trade". This strategy will be in place for the near term. The dollar's advance may stall around 121.90 to 122 because of sell orders placed by Japanese exporters and options barriers. The yen may fall to 123 per dollar by June 30.
Today at 0:50 GMT data were published in Japan: Overall Household Spending, Retail Sales, Small Business Confidence, and the Jobless Rate. Japan's jobless rate fell from 4% to 3.8% which is a nine-year low, and household spending increased by 1.1% for a fourth month in a row in April. Retail Sales data fell for a second month in April, making it more difficult for the Bank of Japan to raise interest rates from 0.5%, the lowest among industrialized nations.
For the first time in nine months the jobs-to-applicants ratio improved in April. The jobs-to-applicants ratio climbed to 1.05 from 1.03 a month earlier, the number climbed to 14-year high of 1.09 last July. The number of full-time employees grew last year for the first time since 2003, and the goal of the Japanese government is to maintain this trend. Even so, while job openings have outnumbered applicants for more than a year, the demand for labor has not driven wages higher. The Average wages declined for a fourth month in March after rising 0.3 percent. Japanese companies continue to hold down labor costs, so it's hard to expect on the short term a dramatic improvement regarding the wages issue.
In the last couple of days, we have witnessed a tight range trading between the 1.3411 support and the 1.3471 resistance.
On the 30 MIN chart a reverse head & shoulders pattern is forming however not yet completed. In the chance that it will be completed we are expecting an upcoming bullish trend which will take this pair to 1.3459 (Fibonacci). Going long if the pair reaches 1.3435 would be the preferable strategy today.
On the 4 H chart it can be observed that the bulls are on their way and the GBP will likely strengthen against the. A Doji was established and after breaking the tight channel resistance barrier, this pair may continue consolidating at the 1.9880 level in the upcoming days.
On the 2 H chart, a falling wedge is to forming in a downtrend which may imply of an upcoming bullish trend. Also the Slow Stochastic is crossing at 9, giving us another signal on the upcoming reversal. Going long at the 121.30 may be the preferable strategy.
This pair is trading in a tight range in the last 5 days however today the channel boundaries might be breached when a rising wedge in a downtrend is to be established, this pattern may take this pair up to the level of 1.2315.
The Wild Card
On the 2 H chart a double bottom pattern is forming which implies an upcoming reversal. RSI at 18 and Slow Stochastic crossed at 15 only strengthening the possibility that this forex pair will consolidate at the 99.90 - 100.00 by the end of this trend........Preferable strategy may be to go long.