EUR/USD Sinks After More Negative U.S. Data
The EUR/USD has dropped through our 3rd tier uptrend line after America’s U of M Consumer Sentiment number came in weaker than expected. Today’s pullback in consumer sentiment adds to yesterday’s disappointing retail sales data. The battered American consumer is not making a return as quickly as analysts hoped due to the persistently high level of unemployment. The S&P futures are off nearly -2% and crude is trading lower by over -3.5% in reaction to the news, dragging the EUR/USD lower due to positive correlations. Meanwhile, the Euro is losing a little bit of its competitive edge from yesterday’s impressive GDP reports after today’s CPI releases both came in one basis point below expectations. The EU’s headline CPI has really taken a beating, showing the ECB may be inclined to injection some more liquidity if prices don’t stabilize soon. Investors should keep an eye on the S&P’s interaction with our 1st tier uptrend line and previous August lows. If these technical cushions don’t hold, the S&P futures could experience a sizable leg down. Such a development would likely pull the EUR/USD lower.
The EUR/USD is presently finding support in our 1st tier downtrend line. The currency pair’s 7/20-7/28 trading range is back in play, meaning these lows should provide solid support should they be tested. The EUR/USD also has our 1st and 2nd tier uptrend lines to fall back on. Hence, the EUR/USD’s medium-term uptrend is intact despite intraday weakness. However, the currency pair continues to build new barriers to the topside, including our 3rd tier uptrend and 2nd tier downtrend lines as well as August 13th highs. On an encouraging note, sell-side volume isn’t at an abnormal level, meaning the EUR/USD’s uptrend shouldn’t be compromised regardless of intraday losses.
Present Price: 1.4242
Supports: 1.4241, 1.4216, 1.4197, 1.4180, 1.4163
Resistances: 1.4267, 1.4282, 1.4293, 1.4306, 1.4325
Psychological: 1.40
GBP/USD Hovers Around 1.65
The Cable is pulling back a bit with U.S. markets trading sharply lower. The GBP/USD is holding up relatively well considering the losses taking place in crude and gold, not to mention the S&P futures are off by nearly -2%. Britain didn’t partake in economic data the last couple sessions, giving investors an opportunity to defend the Cable’s psychological1.65 level. The GBP/USD has a few technical cushions resting nearby, including our 1st and 2nd tier uptrend lines along with 1.65 and August 12th lows. The 1.65 area has proven to be a dense trading zone in the past. Therefore, today’s resilience has history. However, it will be interesting how long the supports hold up should the pullback in U.S. markets pick up momentum. The GBP/USD’s positive correlation with the S&P futures should hold true, particularly if the S&P makes a large technical retracement.
As for the upside, the GBP/USD must confront August 13th and June 30th highs along with our 3rd tier and 2nd tier downtrend lines and the psychological 1.67 level. Hence, there’s quite a battle ahead to the upside. If our 1st tier uptrend line doesn’t hold, then the GBP/USD could experience a more protracted selloff. However, regardless of present downward pressure, the GBP/USD’s medium-term uptrend is intact. Britain will release some heavily-weighted economic data next week, beginning with CPI on Tuesday. We will monitor how the S&P’s shakedown pans out since the bulls are being tested today.
Present Price: 1.6520
Resistances: 1.6524, 1.6550, 1.6578, 1.6611, 1.6630
Supports: 1.6505, 1.6474, 1.6455, 1.6428, 1.6398
Psychological: 1.65
USD/JPY Sinks Beneath our 1st Tier Uptrend Line and 95
The Yen’s appreciation against the Dollar has carried through our 1st tier uptrend line and the psychological 95 level, two important technical supports. Meanwhile, U.S. equities, crude, and gold are trading sharply lower. Hence, we are witnessing broad-based risk aversion. Though the USD/JPY’s sell-side volume remains subdued, downward momentum across the marketplace is a bit disconcerting. The slowdown in the recovery of global economic data is giving investors ample reason to lock-in profits and head for safety. The Yen is benefitting from the shift, much to the BOJ’s chagrin. Investors should keep an eye on the S&P futures and monitor their ability to stay above our 1st tier uptrend line and previous August lows. If the S&P futures experience a technically significant setback, the USD/JPY could be under increasing sell-side pressure.
Japan will kick-off next week by releasing its Prelim GDP number. Analysts are expected Japan’s GDP to turn positive after a dismal start to 2009. If Japan’s Prelim GDP number comes in at or above analyst expectations investors could continue to favor the Yen amid weakness in U.S. consumption and employment data. However, weaker than expected GDP data could help stabilize the USD/JPY. Technically speaking, bulls are hoping the USD/JPY can pop back above our 1st tier uptrend line due to its past relevance. The currency pair has our 2nd tier downtrend line to fall back on for right now, though this trend shouldn’t provide too much support.
Present Price: 94.70
Resistances: 94.95, 95.15, 95.44, 95.65, 96.08
Supports: 94.52, 94.36, 94.08, 93.88, 93.52
Psychological: 95
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as investment advice or as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
The EUR/USD has dropped through our 3rd tier uptrend line after America’s U of M Consumer Sentiment number came in weaker than expected. Today’s pullback in consumer sentiment adds to yesterday’s disappointing retail sales data. The battered American consumer is not making a return as quickly as analysts hoped due to the persistently high level of unemployment. The S&P futures are off nearly -2% and crude is trading lower by over -3.5% in reaction to the news, dragging the EUR/USD lower due to positive correlations. Meanwhile, the Euro is losing a little bit of its competitive edge from yesterday’s impressive GDP reports after today’s CPI releases both came in one basis point below expectations. The EU’s headline CPI has really taken a beating, showing the ECB may be inclined to injection some more liquidity if prices don’t stabilize soon. Investors should keep an eye on the S&P’s interaction with our 1st tier uptrend line and previous August lows. If these technical cushions don’t hold, the S&P futures could experience a sizable leg down. Such a development would likely pull the EUR/USD lower.
The EUR/USD is presently finding support in our 1st tier downtrend line. The currency pair’s 7/20-7/28 trading range is back in play, meaning these lows should provide solid support should they be tested. The EUR/USD also has our 1st and 2nd tier uptrend lines to fall back on. Hence, the EUR/USD’s medium-term uptrend is intact despite intraday weakness. However, the currency pair continues to build new barriers to the topside, including our 3rd tier uptrend and 2nd tier downtrend lines as well as August 13th highs. On an encouraging note, sell-side volume isn’t at an abnormal level, meaning the EUR/USD’s uptrend shouldn’t be compromised regardless of intraday losses.
Present Price: 1.4242
Supports: 1.4241, 1.4216, 1.4197, 1.4180, 1.4163
Resistances: 1.4267, 1.4282, 1.4293, 1.4306, 1.4325
Psychological: 1.40
GBP/USD Hovers Around 1.65
The Cable is pulling back a bit with U.S. markets trading sharply lower. The GBP/USD is holding up relatively well considering the losses taking place in crude and gold, not to mention the S&P futures are off by nearly -2%. Britain didn’t partake in economic data the last couple sessions, giving investors an opportunity to defend the Cable’s psychological1.65 level. The GBP/USD has a few technical cushions resting nearby, including our 1st and 2nd tier uptrend lines along with 1.65 and August 12th lows. The 1.65 area has proven to be a dense trading zone in the past. Therefore, today’s resilience has history. However, it will be interesting how long the supports hold up should the pullback in U.S. markets pick up momentum. The GBP/USD’s positive correlation with the S&P futures should hold true, particularly if the S&P makes a large technical retracement.
As for the upside, the GBP/USD must confront August 13th and June 30th highs along with our 3rd tier and 2nd tier downtrend lines and the psychological 1.67 level. Hence, there’s quite a battle ahead to the upside. If our 1st tier uptrend line doesn’t hold, then the GBP/USD could experience a more protracted selloff. However, regardless of present downward pressure, the GBP/USD’s medium-term uptrend is intact. Britain will release some heavily-weighted economic data next week, beginning with CPI on Tuesday. We will monitor how the S&P’s shakedown pans out since the bulls are being tested today.
Present Price: 1.6520
Resistances: 1.6524, 1.6550, 1.6578, 1.6611, 1.6630
Supports: 1.6505, 1.6474, 1.6455, 1.6428, 1.6398
Psychological: 1.65
USD/JPY Sinks Beneath our 1st Tier Uptrend Line and 95
The Yen’s appreciation against the Dollar has carried through our 1st tier uptrend line and the psychological 95 level, two important technical supports. Meanwhile, U.S. equities, crude, and gold are trading sharply lower. Hence, we are witnessing broad-based risk aversion. Though the USD/JPY’s sell-side volume remains subdued, downward momentum across the marketplace is a bit disconcerting. The slowdown in the recovery of global economic data is giving investors ample reason to lock-in profits and head for safety. The Yen is benefitting from the shift, much to the BOJ’s chagrin. Investors should keep an eye on the S&P futures and monitor their ability to stay above our 1st tier uptrend line and previous August lows. If the S&P futures experience a technically significant setback, the USD/JPY could be under increasing sell-side pressure.
Japan will kick-off next week by releasing its Prelim GDP number. Analysts are expected Japan’s GDP to turn positive after a dismal start to 2009. If Japan’s Prelim GDP number comes in at or above analyst expectations investors could continue to favor the Yen amid weakness in U.S. consumption and employment data. However, weaker than expected GDP data could help stabilize the USD/JPY. Technically speaking, bulls are hoping the USD/JPY can pop back above our 1st tier uptrend line due to its past relevance. The currency pair has our 2nd tier downtrend line to fall back on for right now, though this trend shouldn’t provide too much support.
Present Price: 94.70
Resistances: 94.95, 95.15, 95.44, 95.65, 96.08
Supports: 94.52, 94.36, 94.08, 93.88, 93.52
Psychological: 95
Disclaimer: FastBrokers' market commentary is provided for information purposes only and under no circumstances should be regarded neither as investment advice or as a solicitation or an offer to sell/buy any financial product. FastBrokers assumes no responsibility or liability from gains or losses incurred by the information herein contained. All materials are property of Fast Trading services, LLC and unless otherwise indicated, any unauthorized reproduction is prohibited.
Risk Disclosure: There is a substantial risk of loss in trading futures and foreign exchange. Please carefully review all risk disclosure documents before opening an account as these financial instruments are not appropriate for all investors.
