Thursday�s trading can best be described as �scrappy�. There was no dominant theme for traders to cling to so they were cautious and reverted to type, following equity markets moves as a signal for risk appetite and as a barometer for the Dollar. The CHF seemed to be the subject of intervention (again there was no official comment from the SNB) as, on two occasions, the Swiss Franc took a sharp dive lower within a few hours, only to edge back a little. US data confirmed something that has been growing as a matter of concern overseas; namely, the persistence of unemployment. US initial claims were higher than expected and, alongside other nations including the United Kingdom, look like being a matter of increasing concern in the coming months and years. However, despite these worries, US equities managed to stage a strong late rally which saw the DJIA and S&P close over 2% up on the day and led to a quick Dollar decline to end the proceedings. Risk appetite this week has been of a volatile nature with renewed bounce in risk leading to a weaker greenback overnight. Again there was some demand for JPY crosses from the Japanese investment community, particularly AUD/JPY which prompted a round of stops in AUD/USD above 0.8050 to be triggered. This had the knock on effect of pushing EUR/USD higher to trigger stops above 1.4020 and it was a similar story for GBP/USD which rose to 1.6440.
[B]News and Events:
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Thursday�s trading can best be described as �scrappy�. There was no dominant theme for traders to cling to so they were cautious and reverted to type, following equity markets moves as a signal for risk appetite and as a barometer for the Dollar. The CHF seemed to be the subject of intervention (again there was no official comment from the SNB) as, on two occasions, the Swiss Franc took a sharp dive lower within a few hours, only to edge back a little. US data confirmed something that has been growing as a matter of concern overseas; namely, the persistence of unemployment. US initial claims were higher than expected and, alongside other nations including the United Kingdom, look like being a matter of increasing concern in the coming months and years. However, despite these worries, US equities managed to stage a strong late rally which saw the DJIA and S&P close over 2% up on the day and led to a quick Dollar decline to end the proceedings. The week drew to a close in the Far East in a calm fashion. With NZ GDP proving to be lower than expected (-1.0% QoQ, forecast was -0.7%), NZD/USD slipped from 0.6450 to 0.6410. It later recovered after the Dollar slipped across the board. Risk appetite this week has been of a volatile nature with renewed bounce in risk leading to a weaker greenback overnight. Again there was some demand for JPY crosses from the Japanese investment community, particularly AUD/JPY which prompted a round of stops in AUD/USD above 0.8050 to be triggered. This had the knock on effect of pushing EUR/USD higher to trigger stops above 1.4020 and it was a similar story for GBP/USD which rose to 1.6440. With no new influences on the market, trading petered out and there was very little movement as traders seemed to be glad to put a lackluster week behind them. In the US, today�s key economic releases are the May personal income and spending report at 12:30 GMT and the final June reading of Michigan consumer sentiment at 13:55 GMT. In terms of speakers, Dallas Fed President Fisher (FOMC non-voter) will speak on the US economy at 17:00 GMT.
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Today’s Key Issues (time in GMT):[/B]
12:30 USD Personal Income 0.30% vs. 0.50%
12:30 USD Personal Spending 0.30% vs. -0.10%
12:30 USD PCE Deflator (YoY) 0.10% vs. 0.40%
12:30 USD PCE Core (MoM) 0.10% vs. 0.30%
12:30 USD PCE Core (YoY) 1.80% vs. 1.90%
14:00 USD U. of Michigan Confidence 69 vs. 69
[B]The Risk Today: [/B]
[B]EurUsd:[/B] EURUSD is locked in a 1.3880 to 1.4180 range and with sentiment still elevated we suspect that the weekly cloud high at 1.4185 will continue to provide a meaningful barrier; as it has done for the last month.
[B]GbpUsd:[/B] Intraday we are resigned to more erratic choppy ranging as consolidation continues. Outside of 1.6190 or 1.6625 is needed to break the current status quo.
[B]UsdJpy:[/B] Overbought intraday signals prevailed yesterday and USD/JPY slumped back within its recent range. The absence of material movement suggests more ranging between 94.90 and 96.70 into next week.
[B]UsdChf:[/B] USD/CHF remains broadly capped around 1.1000 indicating that outside the central bank there is not a lot of interest to pay up for the dollar. Indeed if USD/CHF were to slip back below support at 1.0875 then it would suggest a dip back down to 1.0700 and range trading thereafter.
[B]Resistance and Support:
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By[B] Loic Bondiguel [/B]- ACM Advanced Currency Markets, Geneva, Switzerland