Littlefish FX | Dec 18, 2014 05:18AM ET
0900GMT EUR German Ifo Business Climate exp 105.6 v 104.7
0930GMT GBP Retail Sales m/m exp 0.3% v 0.8%
1330GMT USD Unemployment Claims exp 297K v 294K
1500GMT USD Philly Fed Manufacturing Index exp 26.3 v 40.8
USD/JPY whipsawed from a day low of 116.29 to a session high of 118.89 after the Federal Reserve’s latest policy statement and comments from Janet Yellen that signalled the central bank was on track to hike rates next year. Investors will focus on the start of a 2-day BOJ board meeting which will be concluded by tomorrow for further indication on the health of the Japan economy.
November Eurozone CPIs were unrevised in the final readings, printing 0.3% YoY and core at 0.7% YoY which was in-line with the forecasts, while labour cost growth in Q3 rose to 1.3% YoY from 1.2% prev. The euro sold off sharply against the dollar as Fed showed optimism in US economy, printing an Asian session low of 1.2321.
The UK economy increased by 115k jobs in August to October, worse than the expected 137k, while ILO unemployment rate remained at 6.0%. However, GBP/USD dropped to a two week low against the dollar at 1.5543 with the FOMC signalling a possible rate hike in US mid next year in advance of the BOE expected move.
The Canadian dollar finished the session at 1.1629 which got a boost from Oil prices and the balanced rate statement from the Fed also help to send the Canadian dollar higher. The Federal Reserve altered a pledge to keep rates near zero for a “considerable time” in a show of confidence in the US economy.
The Australian dollar printed a new low at 0.8104 as US dollar lifted after the Federal Reserve signaled it was on track to raise interest rates next year. AUDUSD remains under pressure on several fronts, as the RBA has expressed a preference for 0.75 and growth in China slowing down which affects the prices of Australia’s export commodities.
Looking ahead German IFO and UK retail sales are the highlights in the European session and the jobless claims and US service PMI.
OVERNIGHT PRICE ACTION:
EUR: Sharp rejection ahead of 1.26 lows retested
GBP: Sharp rejection ahead of range resistance to retest lows
JPY: Channel support holds on first test
CAD: Whipsaw consolidation at highs
AUD: New multi year lows, 0.80 still eyed
KEY TRADES:
FX Pair | Short Term | Position/Date | Entry Level | Target | Stop | Comments |
EUR/USD | Bearish | Await new signal | ||||
GBP/USD | Bearish | Await new signal | ||||
USD/JPY | Neutral | Await new signal | ||||
USD/CAD | Bullish | BUY 9th DEC | 1.1495 | 1.1695 | 1.1545 | Risk Free |
AUD/USD | Bearish | Await new signal |
ANALYSIS:
EUR/USD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
GBP/USD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
USD/JPY: Short Term (1-3 Days): Neutral – Medium Term (1-3 Weeks) Bullish
USD/CAD: Short Term (1-3 Days): Bullish - Medium Term (1-3 Weeks) Bullish
AUD/USD: Short Term (1-3 Days): Bearish - Medium Term (1-3 Weeks) Bearish
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