FX Briefing: Euro Weaker After Fed Data
Benzinga | Oct 31, 2013 06:51PM ET
EUR/USD
Having weakened after Wednesday's Federal Reserve data, the euro continued to trade sharply lower against the US Dollar Thursday morning after the release of a string of negative eurozone economic news.
German Retail Sales were weak, coming in at -0.4 percent versus expectations of 0.5 percent. Eurozone inflation and employment data also disappointed. Eurozone CPI Flash Estimate came in at 0.7 percent and the low level of inflation reflected here increased the chance the European Central Bank will consider another interest rate cut.
Eurozone unempoyment for September remained at a record high of 12.2 percent.
Support lies beneath around the prior low of 1.3471, with confluence of the nearby 50 period moving average. A marubozu (continuation candlestick) has formed on the EUR/USD daily chart:
GBP/USD
GBP/USD also fell against the US Dollar after the Federal Reserve held the fed funds rate unchanged at 0.25 percent and retained its $85 billion monthly bond-buying program. While the Federal Funds Rate and quantitative easing measures were maintained, the Fed appeared to take a less dovish stance and made no mention of postponing the taper, underpinning the upward momentum in the US Dollar.
A double top pattern has formed on the GBP/USD daily chart.
USD/CHF
USD/CHF reached a seven day high Thursday morning, pressing into resistance of the prior high of 0.9038. Last week a spike in China’s short-term rates helped strengthen the US Dollar, Yen and Swiss Franc, all viewed as ‘safe haven’ currencies. The recent reversal in USD/CHF was ushered in by a doji pattern on the daily chart. Dojis form when the opening and closing prices are equal.
USD/JPY
USD/JPY is trading modestly lower Thursday morning as concerns over weak US jobs data bolstered the safe haven Japanese currency. Nevertheless, the pair is holding above the 'line in the sand’ 200 day moving average.
Thursday's US Jobless Claims number came in at 340K, close to expectations of 339K and falling from the prior week's figure of 350K.
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