The dollar continues to be under pressure on concerns of weaker economic fundamentals. In yesterday’s news, US existing homes sales dropped 8.3%, largest decline in two decades. Traders today will look for New Home Sales and Durable Goods numbers coupled with any indication from the Fed on policy changes in light of this week’s weak numbers.
News and Events:
Also, US consumer confidence fell from 107.2 to 104 in April, mostly blamed on higher energy costs. More interestingly though, the dollar continues to be under pressure on concerns of weaker economic fundamentals. Traders today will look for New Home Sales and Durable Goods numbers coupled with any indication that the Fed will change its policy in light of this week’s weak numbers. Both set of figures are rumored to be better than expected, with new home sales to be 875k from 848k previous, and durable goods to be 2.4% from 1.7% previous.
Today’s most interesting chart is Gold. Its recent sell-off to $681 from $694 is mostly profit taking as the metal crossed the $690 target and as crude oil dropped 2.7% on the Reuters/Jeffries CRB index. Don’t be fooled though, Gold dipped but remains in the upward channel, yesterday’s close above the trend-line. This is a good place to be long, but have Gold cross $692 to confirm a possible move to $700.
Today’s Key Issues (time in GMT):
EUR 8:00 German IFO - Business Climate
EUR 8:00 German IFO - Current Assessment (APR)
EUR 8:00 German IFO - Expectations (APR)
GBP 8:30 Gross Domestic Product (QoQ) (1Q P)
GBP 8:30 Gross Domestic Product (YoY) (1Q P)
GBP 8:30 Index of Services (3MoM) (FEB)
USD 11:00 MBA Mortgage Applications (20-APR)
EUR 12:30 EU Commissioner Joaquin Almunia Speaks in Athens
USD 12:30 Durable Goods Orders (MAR)
USD 12:30 Durable Goods Orders Ex Transportation (MAR)
USD 14:00 New Home Sales (MAR)
USD 14:00 New Home Sales (MoM) (MAR)
USD 14:30 EIA Crude Oil Stocks ( APR 20)
USD 18:00 Federal Reserve’s Beige Book
NZD 21:00 Reserve Bank of New Zealand Rate Decision
NZD 21:00 Tax Receipts, Revenues (MAR)
The Risk Today:
EurUsd: As quoted in yesterday’s newsletter, �Buy on pullbacks but confirm with a break above 1.3585 to remain long.� Target is 1.3666, the Euro’s all-time tradable high, with a possible move to the upper trend-line at 1.3725. First support is 1.3540 with 1.3470 at the trend-line.
GbpUsd already took a turn upwards and we find ourselves in the middle of the upward channel. For bulls, a break above 2.0101 could signal a move higher to 2.0230. For the bears, 1.9953 remains as a big support; a break could signal a move to 1.9863.
UsdJpy: Yesterday’s close at 118.58 was below the 118.63 key level. Bears, short at 118.20 to a move to 117.60. Bulls, wait for a close above 118.75 (trend-line). Above 118.75, the pair can trade to 119.50 and eventually 120.00.
UsdChf continues downwards. It touched 1.2000 in early trading, the big support level. Should we re-visit prices below 1.2000 look to short. A break above 1.2105 could signal a move to 1.2200
Resistance and Support:
By James Brandt, ACM Advanced Currency Markets, Geneva, Switzerland