Recent correlations held true in the NY session as the US dollar lost ground on the back of an energy price rally. Crude oil and the buck have moved in opposite directions nearly 90% of the time over the past month and today was no different. Oil prices spiked to $70.70/bbl and the highest since November. This helped drive the US dollar index to a dismal -1.3% day and back below the 80 level to boot. The 78/77 area now looks like the next crucial support zone here. Equities were up small with the S&P adding 0.35% as an economic optimism report in the US showed confidence up across the board. The Treasury allowing 10 major banks to repay TARP got little traction as the event had pretty well been priced in for some weeks now.

The price action in FX was decidedly dollar negative. EUR/USD spiked more than 100 pips to a close near 1.4060/70. Look for the 200-hour SMA which sits at 1.4100 to provide formidable resistance, but a break above would likely see a run-up towards 1.4150 initially. GBP/USD had a good session and added 125 pips towards the 1.6300/10 zone. The 1.6334 level proved daunting and this marks a 61.8% Fibonacci retracement of the 1.6660 to 1.5800 recent move lower. We would expect continued resistance there. USD/JPY and EUR/JPY were weak with the former down -70 pips to 97.35/40 while the latter was relatively unchanged by the 137 area. The big story here is that USD/JPY has opened below the Ichimoku cloud at 97.50, keeping the bias to the downside for now.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 6/9 22:45 GMT NZ  Terms of Trade Index (QoQ)  1Q  -0.90%  -3.80%
  • 6/9 22:45 GMT NZ  NZ Card Spending (MoM)  MAY  0.3  - -
  • 6/9 23:50 GMT JN  Machine Orders (MoM)  APR  -1.30%  -0.70%
  • 6/9 23:50 GMT JN  Machine Orders YOY%  APR  -22.20%  -29.50%
  • 6/9 23:50 GMT JN  Domestic CGPI (MoM)  MAY  -0.40%  -0.30%
  • 6/9 23:50 GMT JN  Domestic CGPI (YoY)  MAY  -3.80%  -5.10%
  • 6/1  1:00 GMT AU  Westpac Consumer Confidence  JUN  -4.30%  - -
  • 6/1  1:30 GMT AU  Home Loans  APR  - -  1.50%
  • 6/1  1:30 GMT AU  Investment Lending  APR  - -  - -
  • 6/1  1:30 GMT AU  Value of Loans MoM  APR  - -  - -