MIDDAY SNAPSHOT & ANALYSIS OF SELECTED RATES
Data on the whole this morning has come in on the better side of expectations with Canada international trade much stronger while the US trade data has shown a narrower than expected trade deficit. Also out of the US has been IBD/TIPP consumer optimism which has come in slightly weaker at 48.6. In a strange twist of events, an accidental early release of some of tomorrow’s UK data has prompted a full disclosure of the figures. With the exception of the ILO unemployment rate which was higher than expected, all of the data has been encouraging, with the jobless claims change and average earnings data coming in stronger, while the claimant count rise was in line. The UK NIESR GDP estimates have also been released coming in as expected at -1.5% for April, up from a revised -1.9% reading in March to indicate that the pace of contraction could be slowing. ECB Tumpel-Gugerell echoes recent central bank sentiment after saying that rates are appropriate. Commodities are marginally higher on the day with oil trading to fresh yearly highs above $60 and gold mildly bid on a weaker USD and bullish commodity comments from well known investor Jim Rogers. Famed analyst Meredith Whitney has said that US banking stocks are “grossly overvalued” which could also be helping to prop gold prices. Safe-haven currencies have benefited in the US session with price action correlating to yet another wave of selling in US equities.
ANALYSIS OF SELECTED RATES
Eur/Usd: At this point, a full retracement of the 1.3740-1.2885 March to April move is to be expected and we look for a retest and break above 1.3740 over the coming hours. However, after stops have been cleared above 1.3740, scope for additional gain is limited with the market expected to stall out ahead of 1.3800. Daily studies are approaching overbought and we view any rallies towards 1.3800 as a good short-term sell opportunity. Strategy: SELL @1.3795 FOR A 1.3560 OBJECTIVE, STOP @1.3925. Stops to be trailed to cost on a break back below 1.3745. If trade triggers and 1.3745 not broken, position to be closed out at NY close (5pm NY time) on Tuesday. Recommendation to be removed if not triggered by NY close on Tuesday.
Written by Joel Kruger, Technical Currency Strategist for DailyFX.com
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Joel Kruger publishes 6 daily pieces:
“Tech Talk” – A Daily Video Highlighting Technical Developments in the Overnight Session of Trade.
Monday-Friday (between 5:30am-6:30am EST)
“Morning Slices” – Morning Overview using Fundamental, Technical, Flow, and Quantitative Analysis (Includes “Trade of the Day”).
Monday-Friday (between 6:30am-7:30am EST)
“Indicator of the Day” – A Feature Report that Highlights our Most Significant Technical Indicator of the Day.
Monday-Friday (between 8:00am-9:00am EST)
“Cross Country” – A Midday Fundamental Update, along with Technical Analysis of Selected Cross Rates.
Monday-Friday (between 10:30am-11:30am EST)
“Scandi Daily” – A Specialized Daily Fundamental and Technical Overview of the Nordic Currencies. (This report is only distributed through email. Please contact Nordic@fxcm.com if you would like to be added to distribution.)
Monday-Friday (between 11:30am-12:30pm EST)
“Daily Classical” – A Daily Technical Overview of the Major Currencies.
Monday-Friday (published between 2:00pm-3:00pm EST)
