Having been sent much lower in value on Thursday the USD was unable to break free from the weak side of its range on Friday. Today is the Memorial Day holiday in the U.S. and there will be no economic data released and all markets in the States will be closed. The USD now finds itself languishing in a poor short term trend against all the major currencies. Important releases are on schedule from the U.S. this week and when investors return to their offices tomorrow they will have a large menu in which to choose from when trying to decipher the sentiment of the marketplace and consider their own outlooks.
On Tuesday the U.S. will release its CB Consumer Confidence numbers and the S&P/CS Composite-20 HPI will also be brought forth. On Wednesday the U.S. Existing Home Sales data will be published. If this isn�t enough to ring alarm bells taking into consideration the manner in which the USD has traded the past two weeks, Thursday Core Durable Goods and weekly Unemployment Claims figures are on the calendar. Topping this off will be the Preliminary GDP results on Friday. The stock markets continued to turn in rather lack luster results ending last week and the fact that there is a holiday in the U.S. today will open the door for possible volatility when full volume returns tomorrow. Expect a cautious and fairly consolidated trading range for the USD today because it will be the calm before the storm.
EUR
The EUR held onto all of its gains on Friday after slaughtering the USD on Thursday. In a market that had relatively light volume the European Flash PMI numbers provided positive data for EUR bull investors. Within the depths of recession and the rather argumentative outlooks that investors are debating, the EUR has certainly turned in a progressively strong trend the past three weeks. European markets will be open today but investors will likely be rather cautious about entering waters that are shallow regarding participants because of the holidays in the U.K. and the U.S… Germany will release its Ifo Business Climate survey today and a result of 85.1 is expected. Tomorrow the German�s will publish their Final GDP and the GfK Consumer Climate numbers. The bold strides that the EUR made closing out last week may be put on hold today because of holiday trading, but tomorrow and the remainder of the week will offer a window of opportunity for traders willing to test these ranges.
GBP
The U.K. like the U.S. will be on holiday today which will serve as a tranquil break from a marketplace that has created a bulwark of stability for the Sterling. On Friday the U.K. released its Revised GDP numbers and they met expectations with an outcome of minus -1.9. However, the report did show weakening household spending figures and the only increase from spending came via the government. The GBP will see a rather cautious market today but investors will be ready for the buzz that is sure to begin on Tuesday when the international marketplace is back to snuff. Tomorrow the U.K. will see the publication of the Nationwide HPI numbers. This will be a big week of housing and retail data from the U.K. and the Sterling will have yet another chance to prove its doubters wrong.
JPY
Like all the major currencies the JPY was able to hold its own against the USD on Friday. The JPY had a bit of volatility seep into the marketplace earlier today when North Korea confirmed that it has tested a nuclear device deep underground its own territory. This caused the JPY to stutter for a moment. However, the JPY market will likely remain relatively cautious until the markets return to stronger volumes tomorrow as all traders step back into the game. Gold remains at a telltale value, showing significant strength in markets that have more questions than answers.
Written by: Robert Petrucci
Bforex Chief Commodity Expert and Forex Analyst