The greenback moved higher after Fed Chairman Ben Bernanke issued another concern on long-term inflation. Swiss CPI rose to 2.9% y/y, coming out higher than expectations (2.4%), the highest figure in fourteen years. Today, we look forward to the ECB and BoE decisions.
News and Events:
The dollar continued strengthening against the Euro and British Pound in yesterday�s American session, pushing the EURUSD to 1.5385 and GBPUSD to 1.9507. These levels are 635points and 1,654points off their all-time highs, respectively. The greenback moved higher after Fed Chairman Ben Bernanke issued another concern on long-term inflation and solidified his stance of fully monitoring price stability more than any other issue. ISM non-manufacturing came out at no-change, 51.7, and the ADP employment report beat expectations, coming out at a gain of 40k jobs. Today, we look forward to the two central bank decisions, as well as US jobless claims due at 12.330h GMT.
Swiss CPI rose to 2.9% y/y, coming out higher than expectations (2.4%), the highest figure in fourteen years. Economists point to rising energy, housing and transport costs. Swiss economic growth outlook remains positive.
Today’s Key Issues (time in GMT):
10:00 EUR German Factory Orders s.a. (MoM) (APR) 0.4% vs -0.6%
10:00 EUR German Factory Orders n.s.a. (YoY) (APR) 6.4% vs -5.0%
11:00 GBP Bank of England Rate Decision 5.00% vs 5.00%
11:45 EUR European Central Bank Rate Decision 4.00% vs 4.00%
12:30 USD Initial Jobless Claims (MAY 31) 370K vs 372K
12:30 USD Continuing Claims (MAY 24)
12:30 CAD Building Permits (MoM) (APR) 0.7% vs -4.5%
14:00 CAD Ivey Purchasing Managers Index (MAY) 58.0 vs 57.6
16:00 USD Philadelphia Fed’s Plosser Speaks on Financial Stability in NY
17:30 USD ICSC Chain Store Sales (YoY) (MAY)
The Risk Today:
EurUsd: hit our target of 1.5393 and a low of just 1.5385. As we expected, a small bounce of that support level. A close below 1.5363 will open the door to 1.5282.
GbpUsd: continuing its medium-term downtrend and targeting 1.9364. A break above 1.9974 would threaten the bearish bias.
UsdJpy: Next stop is 105.88 (currently trading at 105.83). This is a major resistance level, and once broken, 106.51 will come very easily. On the downside, support holds firm at 104.55.
UsdChf: The target is 1.0610. Strong support holds all the way down to 1.0216
Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland