Americas Roundup: – Euro reversed Intraday Losses, turned Positive Against $ During the American Session – 29 May, 2015

Market Roundup

  • US Initial Jobless Claims w/e  282k, (consensus 270k, previous 275k)
  • US Pending Home Sales Chg MM Apr 3.4%, (consensus 0.9%, previous 1.2%) – disregarded
  • Canada Current Account CAD Q1 -17.47b, (consensus -18.50b, previous -13.05b)
  • Fed’s Kocherlakota (dove) raising int rates this year not consistent with Fed mandates, doesn’t expect inflation to return to 2% until 2018
  • Kocherlakota: Raising rates now would weaken economy, make it more vulnerable to future shocks
  • Kocherlakota: If Fed raises rates in 2015, risks losing credibility on inflation target
  • Fed’S Bullard releases paper on what optimal policy would be with interest rates at zero, makes case for nominal gdp targeting
  • IMF says Greece did not ask to move repayments to end-June, work still needs to be done on negotiations with Greece, Talks intense
  • IMF’s Lagarde Greek exit from euro is a possibility but probably not end of euro (FAZ)
  • Yen rebounds after Japan FinMin Aso calls recent yen drop roughly; will closely monitor
  • Reuters Poll ECB will end QE in Sept 2016 (54/75 economists)

Economic Data Ahead

  • (1845 ET/ 2245 GMT) NewZealand Building Consents Apr (previous 11%)
  • (1930 ET/ 2330 GMT) Japan All Hhold Spending MM Apr (consensus -0.7%, previous 2.4%)
  • (1930 ET/ 2330 GMT) Japan CPI, Core Nationwide YY Apr (consensus 0.2%, previous 2.2%)
  • (1930 ET/ 2330 GMT) Japan CPI, Overall Nationwide Apr (previous 2.3%)
  • (1930 ET/ 2330 GMT) Japan Jobs/Applicants Ratio Apr (consensus 1.15, previous 1.15)
  • (1930 ET/ 2330 GMT) Japan Unemployment Rate Apr (consensus 3.4%, previous 3.4%)
  • (1950 ET/ 2350 GMT) Japan Industrial output prelim mm Apr (consensus 0.8%, previous -0.8%)
  • (2100 ET/ 0100 GMT) NewZealand NBNZ Business Outlook May (previous 30.2%)
  • (2100 ET/ 0100 GMT) Australia HIA New Home Sales m/m Apr (previous 4.4%)
  • (2130 ET/ 0130 GMT) Australia Private Sector Credit Apr (consensus 0.5%, previous 0.5%)
  • (0100 ET/ 0500 GMT) Japan Construction Orders YY Apr previous 10.8%)
  • (0100 ET/ 0500 GMT) Japan Housing Starts YY Apr (consensus 0%, previous 0.7%)

Key Events Ahead 

  • No Significant Events

FX Recap 

USD/JPY fell back below 124.00 as Greenback weakened during the American session. Yen continued to fall across the board, adding to weekly losses. USD/JPY slipped to test daily lows but found support at 123.60 and rose back toward 124.00. At the time of writing the pair trades at 123.85/90 slightly above yesterday’s closing price. In Friday’s docket are several economic reports from Japan – unemployment, industrial production, among others and in the US will be the turn of the second reading of Q1 GDP. Option expiries for Friday 29 May: 122.00 (565M), 122.75 (255M), 125.00 (370M). 

USD/CAD: Mixed results from the US docket – with Initial Claims and Pending Home Sales running in opposite directions – plus a narrower current account deficit in Canada during the first quarter plotted against USD/CAD. The pair fell to session lows around 1.2430 as sentiment towards the risk appetite has returned to the markets today, triggering a correction lower in spot. On Friday second revision of US Q1 GDP, followed by the final April’s U Mitch Consumer Sentiment will be in focus. Currently the pair is down 0.17% at 1.2431. Next support is at 1.2400 (psychological level) followed by 1.2396 (low May 27) and finally 1.2304 (low May 26). Resistances are seen at 1.2540 (high May 28), 1.2522 (high Aprl 7) and then 1.2555 (low Apr 13). Option expiries for Friday 29 May: 1.2400 (250M), 1.2450 (200M), 1.2600 (401M)  

EUR/USD was confined to range trading during most of the day. Despite the lack of progress in Greek negotiations, EUR/USD is on track to close its second consecutive day with gains. Euro managed to reverse intraday losses versus the greenback and turned positive during the American session.  After reaching a daily high of 1.0958, the pair is currently trading at 1.0935, up 0.30% on the day. Immediate resistances are seen at 1.0958 (daily high), 1.0980 (May 26 high) and 1.1000 (psychological level). On the downside, supports could be found at 1.0867 (daily low), 1.0819 (May 27 low) and 1.0800 (psychological level). Option expiries for Friday 29 May: 1.0800 (564M), 1.0850 (716M), 1.0900 (1.8BLN), 1.0950 (767M) 1.1000 (1.6BLN)

EUR/CHF has been falling constantly since May 18 after being unable to break above 1.0500. Today again the pair is testing a key support area at 1.0300, a break below  is likely to trigger another bearish run. Euro could remain under pressure against the franc as negotiations between Greece and the Brussels Group continue and an agreement still looks far. On Friday, Q1 growth data will be released in Switzerland, while Germany will report retails sales and the European Central Bank will publish monetary aggregates information. 

The material has been provided by InstaForex Company – www.instaforex.com

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