Quick Recap
The Euro looks incredibly weak this morning after breaking down through the January low overnight. The key catalyst is hard to pin down. But having said that sentiment is clearly against the Euro as the US economy looks set to continue to lift and the Fed seems on track to tighten.
That was the message that occupied traders minds last night as they looked at the Biege book (growth) and the data that was released.
Realistically though as I wrote recently we get time and or price consolidations. The USD had a time consolidation and has now resumed its uptrend against the Euro. The US economy has also gone through a period where the data undershot expectations – in a material way. So the focus is back on the downside.
Elsewhere US stocks are lower on the day. Traders told my colleagues at BI US that the selling was largely on the back of profit taking after a nice run recently and some worries about the non-farms on Friday and what it might mean for the Fed’s rate hike intentions.
That also hurt the Euro
On the day
On the data front today, retail sales for January is really important today in gauging where the Australian economy is in early 2015. Yesterday’s GDP was not strong but the consumer side of the economy is doing relatively well. Trade is also out and then tonight we get German factory orders, Italian GDP and the big event is the BoE and ECB board meetings.
And here’s the overnight Scoreboard (8.45 am AEDT):
- Dow Jones down 0.58%, 106 points to 18,097
- Nasdaq down 0.26%, 13 points to 4,967
- S&P down 0.42%, 9 points to 2,099
- London(FTSE 100) up 0.43%, 30 points to 6,919
- Frankfurt (DAX) up 0.97%, 110 points to 11,390
- Paris (CAC) up 0.98% to 4,917
- Tokyo(Nikkei) down 0.59%, 111 points to 18,704
- Shanghai (Composite) up 0.52%, 17 points to 3,280
- Hong Kong (Hang Seng) down 0.96% to 24,465
- ASX Futures (SPI June) up 2 points to 5,879
- AUDUSD: 0.7819
- EURUSD: 1.1080
- Crude: $51.70
- Gold: $1,200.53
CHART OF THE DAY:
EURUSD – Breaking down:
The Euro has broken below support on the dailies and is loking very weak. If I use a simply Fibo projection I get a move to the low 105 region now that the January low has broken.
But looking at the monthly chart below you can see the scope for a further fall over coming months toward the 1.00/1.01 region.
Recommended Content
Editors’ Picks
EUR/USD holds above 1.0650 after US data
EUR/USD retreats from session highs but manages to hold above 1.0650 in the early American session. Upbeat macroeconomic data releases from the US helps the US Dollar find a foothold and limits the pair's upside.
GBP/USD retreats toward 1.2450 on modest USD rebound
GBP/USD edges lower in the second half of the day and trades at around 1.2450. Better-than-expected Jobless Claims and Philadelphia Fed Manufacturing Index data from the US provides a support to the USD and forces the pair to stay on the back foot.
Gold is closely monitoring geopolitics
Gold trades in positive territory above $2,380 on Thursday. Although the benchmark 10-year US Treasury bond yield holds steady following upbeat US data, XAU/USD continues to stretch higher on growing fears over a deepening conflict in the Middle East.
Ripple faces significant correction as former SEC litigator says lawsuit could make it to Supreme Court
Ripple (XRP) price hovers below the key $0.50 level on Thursday after failing at another attempt to break and close above the resistance for the fourth day in a row.
Have we seen the extent of the Fed rate repricing?
Markets have been mostly consolidating recent moves into Thursday. We’ve seen some profit taking on Dollar longs and renewed demand for US equities into the dip. Whether or not this holds up is a completely different story.