Will the EUR push ahead from here?
Economical News
USD
The greenback's negative momentum continued as it traded at record highs against the EUR and GBP. The massive depreciation in Dollar value is not derived from economic events anymore, as yesterday both figures that came from the United States were relatively positive. The Unemployment Claims went down a bit to 308K which is better than the expected 315K and the previous 320K. The US Trade Deficit rose a bit to-60BLN, but it came perfectly inline with expectation and should have been priced in not causing further deterioration in the already shaky USD status.
As for today, there are several news releases expected today from the US market. The first one will be the US Retail Sales and the Core Retail sales (13:30 GMT). The figure makes up a large portion of the consumer spending, which is a major driver of the economy and has a sizable impact on GDP. Traders pay close attention to Retail Sales because it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises. The forecast is 0.0% for the Retail Sales and 0.2% for the Core figure which was released at 1.3% last month, which indicates that the sentiment is again negative for the greenback. Following this will be the release of the Import Price Index which is expected to drop from 0.9% to 0.6%. Sealing the economic releases will be the University of Michigan's Consumer Sentiment, which is the only release that has a positive forecast at 86.0 but still very close to last month's release of 85.3, and will probably not have any effect on the ongoing negative rally.
It looks as if the greenback is going to continue in the same direction, at least until the end of this week and through the beginning of the next one.
EUR
The European currency seems to have found some stability of after a very volatile start to the week. The EUR has stabilized at the 1.3780 level against the greenback and it seems that this week's very robust bullish run may have just hit a peak. Yesterday the only news that came out of the Eurozone was the Industrial Production m/m which came in slightly lower than expected at 0.9 %. The release of this figure was not expected to cause much market movement and therefore the EUR remained relatively unaffected by this data. Today will also be light on significant news with the French CPI m/m being the only data due for release. The figure is expected to release at 0.1 % which is lower than last months figure of 0.3 %. We should see the EUR maintain its bullish stance on the market as the European Central Bank has been reiterating that interest rates are still low enough to support economic growth suggesting that there is a possibility of a future rate hike and the ECB stated further that its monetary policy is still on the accommodative side.
JPY
It has been a very important day for the Japanese market yesterday, as the Bank of Japan held its monthly monetary policy meeting. As expected the Bank left the interest rate unchanged at 0.5%. The well known picture did not cause any massive market shaking and was completely priced in. the decision to keep the rates unchanged was accepted with a majority of 8-1. The BOJ Governor Fukui said: “There's no change in our expectations that the economy will continue this lasting growth”. Fukui added a slightly more pessimistic note regarding the second quarter saying “it will be a bit weaker than the first quarter. It appears that the next rate hike might be in august and if it will not happen then we should expect carry trades to once again continue in full force, as it will leave the JPY still very much attractive against higher yielding currencies. Today the JPY will continue to range trade against the greenback at its current levels but the there are strong indications that the JPY will extend its losses against the USD later on in the trading day. Looking ahead it will be crucial for the JPY of when the BoJ will raise its key interest rate and an August rate hike may finally push the JPY on a sustained rally
Technical Analysis
EUR/USD
After touching the all time high at 1.3793, the pair now consolidates around 1.3780. Due to the extremely overbought levels it would be smart to buy on dips and wait for the 1.3800 break, which will probably arrive soon. All indicators show that the momentum is very positive, and we might see the pair break through record high several times in the near future.
GBP/USD
The pair is in the midst of a correction move to the 2.0300 zone, after peaking at a record level of 2.0360. If the pair will break through the 2.0250 support level, than the correction move might be deeper. The 4 Hour chart indicates a strong upwards momentum and once the overbought situation will unwind, the pair will probably continue.
USD/JPY
The positive momentum continues for the second day, as the pair is floating at the 122.50 level. The daily chart is bullish and is supported by a bullish 4 Hour study as well. It looks as if the target price for that move is 123.00.
USD/CHF
After several attempts to break through the very important support level of 1.2000, the pair was a bit shy of that move and is now consolidating around 1.2030. The ongoing momentum is down, as traders should pay close attention to the 1.2000 level, as if it is breached than a much deeper move would be imminent.
Wild Card
AUD/USD
It looks as if the pair's move is close to unstoppable, as all of the indicators are pointing up. The strongest signal comes from the daily studies which show that there is still plenty more room to run. This situation provides Forex traders with the opportunity to jump into a very strong uptrend that seems to have a lot of steam in it.
Market Trend
| EUR/USD | GBP/USD | USD/JPY | USD/CHF | AUD/USD | EUR/GBP | |
|---|---|---|---|---|---|---|
| Daily Trend |  |
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| Weekly Trend | |
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| Resistance | 1.3510 | 1.9945 | 124.14 | 1.2514 | 0.8534 | 0.6843 |
| 1.3476 | 1.9899 | 123.78 | 1.2495 | 0.8500 | 0.6810 | |
| 1.3400 | 1.9849 | 123.50 | 1.2423 | 0.8478 | 0.6767 | |
| Support | 1.3315 | 1.9779 | 122.99 | 1.2360 | 0.8400 | 0.6700 |
| 1.3265 | 1.9753 | 122.50 | 1.2312 | 0.8367 | 0.6682 | |
| 1.3240 | 1.9625 | 122.23 | 1.2289 | 0.8334 | 0.6653 |
Indicators
| Date | Time GMT | $€£¥ | Event | Period | Prev. | Forecast | Imp |
|---|---|---|---|---|---|---|---|
| 13/07/07 | 06:45 | EUR | French CPI | m/m | 0.3% | 01% |  |
| 13/07/07 | 08:00 | GBP | Bank Of England Bean Speaks |  | |||
| 13/07/07 | 12:30 | USD | Retail Sales | m/m | 1.4% | 0.0% | |
| 13/07/07 | 12:30 | USD | Core Retail Sales | m/m | 1.3% | 0.2% |  |
| 13/07/07 | 12:30 | USD | Import Price Index | m/m | 0.9% | 0.6% | |
| 13/07/07 | 14:00 | USD | Consumer Sentiment | 85.3 | 86.0 | |