Littlefish FX | Aug 19, 2015 07:10AM ET
Market Commentary
Traders are focused on the minutes of the July FOMC meeting due tonight. USD was broadly stronger thanks to housing starts data. While the rise in housing starts was modest, the level is at its highest since Oct 2007.
EUR stayed soft amid a firm USD overnight. ECB cuts ELA to Greece to EUR89.7bn, from EUR90.8bn, at the request of Greek Central bank, citing improving liquidity conditions. On Greek’s 3rd bailout package, Spain voted overwhelmingly to approve (even though it is not required to vote). German parliament is next to vote today.
GBP/USD rose to high of 1.5717 on better than expected CPI inflation data. July core inflation rose to 5-month high of 1.2% (vs. 0.8% prior); this data keeps the BOE rate move story in play as cable edged to a seven-and-a-half year high against a trade-weighted basket of currencies, bolstered by the expectation of UK rate hike. GBP was last sighted at 1.5665 levels this morning.
USD/JPY is inching lower slightly to around 124.38 on dollar softness and as the JPY is sold off against the EUR this morning. Pair is still trading well-within its current 123.80-125.00 range. July trade data release, which showed the trade deficit widening to JPY268.1bn in Jul vs. Jun’s – JPY70.5bn and cons. estimate of -JPY53bn on the back of rising exports of 7.6% y/y and falling imports of 3.2% y/y, had a limited impact on the pair and it appears players are waiting for tonight’s FOMC minutes before positioning.
Technical Commentary
EUR/USD Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
GBP/USD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
USD/JPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish
EUR/JPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bearish
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