US advanced GDP expected to fall

<p>EUR/USD is still holding up well after its initial fall from the FOMC statement on Wednesday. Yesterday, it saw some good buying from below the […]</p>

EUR/USD is still holding up well after its initial fall from the FOMC statement on Wednesday. Yesterday, it saw some good buying from below the 1.12 level, with the Eurozone economic confidence rising to 6-month highs. The market however overcame the German inflation data hitting a negative figure for the first time since 2009, in a possible sign that the market is expecting the rise in inflation in the coming months once the QE starts. Today the main event for the EU will be the Eurozone CPI flash estimate, which is expected to fall year on year from -0.2% to -0.5%. However, if the reaction to the German data is anything to go by, perhaps this won’t have an effect.

The USD has been on a positive run since the FOMC indicated it wasn’t overly concerned about the drop in oil, even though it may cause a drop in inflation in the short-term. Overnight comments from senators suggest that no rate rise is on the horizon, as there are concerns abroad. The US dollar has fallen against most at the start of this trading session, possibly on the back of this information. Today’s data will be a test as the Advanced GDP q/q is released expecting a fall from 5% to 3%.

USD/CAD is still continuing its impressive run now hitting 6-year highs with oil prices and the Fed keeping the CAD weak.

Sterling has found it hard to hold above the 1.5200 level since the FOMC statement and yesterday’s better than expected US jobless claims. With no data being released today, we look towards Monday’s data of the ISM manufacturing PMI.

Overnight the Tokyo CPI data was released lower than expected, causing a slight sell-off in USD/JPY which has held with the weakness of the USD into this early trade session.

The Aussie had a big sell-off yesterday, with chatter around that the RBA will be cutting rates to 2% from 2.5% next week. The AUD had a bounce last night as the PPI gives it some respite until next week’s announcement.

 

 

EUR/USD
Supports  1.1275-1.1215-1.1170   | Resistance 1.1380-1.1430-1.1490

 

 

USD/JPY
Supports  117.70-117.20-116.80   Resistance  118.70-119.05-119.60

 

 

GBP/USD
Supports  1.5010-1.4940-1.4865   Resistance  1.5150-1.5230-1.5300

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.