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European Session – Euro struggles at $1.12 on firmer dollar after Fed speakers boost rate hike expectations

Posted on May 23, 2016 at 2:49 pm GMT

The euro underperformed today and fell below the key $1.12 level as disappointing Eurozone PMI data and a broadly stronger greenback weighed on the single currency. The euro dropped to as low as $1.1186 after having reached an early European session high of $1.1238. The flash version of Eurozone manufacturing and services PMI missed forecasts for May and raised concerns about the health of the region’s economy. The composite PMI registered at a 16-month low of 52.9 versus a prior [..]

Technical Analysis – US 500 index futures turn neutral, move into cloud

Posted on May 23, 2016 at 1:50 pm GMT

The US 500 stock index futures has been losing momentum since the February-April rally came to a halt in late April. The index has been moving towards the ascending Ichimoku cloud in the past few days, with the 50-day moving average acting as a resistance since prices slipped below it, while the top of the cloud has been providing support. The near-term bias is neutral as RSI is flat just below 50 and the MACD signal line is levelling off [..]

Eurozone PMI disappoints in May; euro tests 1.12 dollars

Posted on May 23, 2016 at 10:02 am GMT

Activity in the euro area slowed slightly to a 16-month low in May according to the flash reading of Markit’s composite PMI. The composite PMI, which comprises both the manufacturing and services sectors, fell slightly to 52.9 in May from 53.0 in April. The figure is below forecasts that it would rise to 53.2. The PMI figures for April and May are pointing to slower growth across the Eurozone in the second quarter of the year so far. At the [..]

Asian Session – Dollar holds near highs but down vs yen on widening Japan trade surplus

Posted on May 23, 2016 at 7:28 am GMT

The US dollar was on Monday trading not far off from last week’s highs when it rallied on hawkish Fed meeting minutes that raised the prospect of a June or July rate hike. There were more hawkish comments yesterday from Boston Fed President Eric Rosengren who added to the strong signals coming from FOMC members in recent days. In an interview with the FT, Rosengren said that the conditions set out in the minutes are “on the verge of broadly [..]

Technical Analysis – EURUSD pauses decline, rises back above key 1.12 level

Posted on May 23, 2016 at 7:03 am GMT

EURUSD remained above the key 1.12 level for a second trading day after dipping below it last Thursday for the first time since late-March. The lower Bollinger Band at 1.1179 lent support and helped prices bounce. The 1.12 level is now acting as an immediate support level. It is also the 38.2% Fibonacci level of the retracement of the upleg from 1.0520 to 1.1615. Below this level, the 50% Fibonacci lies at 1.1067. A drop below this would shift the [..]

European Session – Dollar extends post-FOMC minutes gains, sterling falls on dovish MPC member comments

Posted on May 20, 2016 at 2:37 pm GMT

The US dollar is on track to end the week with strong gains due to a shift in the US rate outlook after Wednesday’s hawkish FOMC minutes. Most major currencies consolidated weakness against the greenback today and were range-bound for the European and Asian sessions, following the decline driven by the FOMC minutes, which suggested a rate hike is possible in June. During the European session, most major pairs were flat, with the exception of the dollar/yen pair which rose [..]

Fed surprises markets with hawkish speakers – minutes

Posted on May 20, 2016 at 2:09 pm GMT

The key development of the previous few days has been the shift in expectations about a possible Fed rate hike during the June / July period. Whereas markets even a week ago attached a very low probability to a rate hike in the next two months, following this week’s Fed speakers and the release of the minutes from the April FOMC meeting, this perception has changed. The result of this has been renewed strength of the US dollar, as the [..]

Week Ahead – Busy week for PMI and GDP data; Fed speakers also eyed

Posted on May 20, 2016 at 12:55 pm GMT

Preliminary PMI readings for the Eurozone will be among the main data releases of the coming week along with second estimate GDP for the first quarter for the UK, the US and Germany, as well as Japanese inflation. The US calendar will be the busiest with housing data and durable goods orders also due. However, upcoming speeches from several Fed officials could attract more attention given the recent strong signals coming from the Fed lately on a possible June/July rate hike. [..]

Asian Session – Dollar pauses for breath but oil heads back up again

Posted on May 20, 2016 at 8:21 am GMT

Fed rate hike talk continued to dominate the market theme on Friday but the dollar took a pause on the week’s last day of trading. On Thursday, New York Fed President William Dudley further reinforced expectations that the Fed could raise rates in June or July. Dudley said the Fed is “on track to satisfy a lot of the conditions” adding that he was surprised that the markets had not priced a higher probability of a rate rise. The dollar [..]

Technical Analysis – Gold bounces up from key Fibonacci level

Posted on May 20, 2016 at 7:04 am GMT

Gold prices found support at the 23.6% Fibonacci level at 1243.02, which is the retracement of the upleg from 1047.57 to 1303.58 (December to May rise). Prices bounced up from this level, which could indicate that the decline from the 4-month peak of 1303.58 was a correction and the bullish market structure that was in place from 1047.57 could continue. The bullish crossover of the 50-day moving average above the 200-day moving average in February was a bullish signal. While [..]

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