Calm before another storm?

<p>The dollar consolidates in a low volume Asian session following the losses seen yesterday as S&P futures and the US 10-year yield trade in a […]</p>

The dollar consolidates in a low volume Asian session following the losses seen yesterday as S&P futures and the US 10-year yield trade in a less volatile manner. The market is in a defensive, risk averse mode as the fear factor moves to US economy, which was one of the only bright spots in the global growth picture. It seems the cliché ‘The US sneezes and the rest of the world catches a cold’ is working in reverse as the latest catalyst for concern came from a slightly weaker retail sales number. I personally feel this didn’t  warrant a 34 basis point drop in the US 10-year treasury yield (largest intraday move in 20 years) but that just shows how nervous and heavily positioned the market is.

The NZD showed further signs of stability in the dollar sell off. New Zealand’s dairy farmers breathed a sigh of relief as the GDT dairy auction produced a 1.4% increase in average prices yesterday following a 7.3% decline in the previous auction.

The data events today consist of harmonised EU CPI data where the consensus look for a reading of 0.3% versus the previous outcome of 0.4%. The US session brings us a host of secondary readings with initial jobless claims, capacity utilisation, industrial and manufacturing production along with the Philly fed survey at 3pm London time.

 

EUR/USD

Supports 1.2750-1.2680-1.2620   | Resistance 1.2850-1.2890-1.2950

 

USD/JPY

Supports 105.20-105.05-104.50   Resistance 106.80-107.50-108.00

 



GBP/USD

Supports 1.5885-1.5855-1.5785  Resistance 1.6050-1.6085-1.6130

 

 

Join our live webinars for the latest analysis and trading ideas. Register now

GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.