Tuesday's FX Analysis: US Data Continues to Swamp Dollar
Littlefish FX | Apr 16, 2013 04:24PM ET
Some big moves in currencies today following a mixed bag of data.
First data up this Tueday: U.K. CPI and PPI. A bit of a mix ahead of Wednesday's BoE minutes, with markets now expecting a 6 to 3 vote against QE. If we get a much closer vote we could see the pound dip again.
Following the U.K., data released were eurozone CPI (better than expected) and European and German ZEW Economic Sentiment, both worse than expected.
This data mix from the U.K. and eurozone gave a little pause for thought during the day, with both pairs consolidating.
Lunch time saw the release of CPI data in the U.S., coming in worse than expected. The recent run of poor U.S. data has weighed heavy on the USD (hence the title of our Week ahead analysis) and this was no different. The euro and Pound shrugged off earlier disappointments and pushed higher on the news, both closing the day at key resistance levels.
Key data on Wednesday comes in the form of the BoE minutes, BoC Interest Rate Decision and Report and potential commentary out of FOMC voters in the afternoon.
recent commentary from FOMC members has continued to highlight the ongoing need for QE, which also contributes to U.S. data woes. Further comments could again see a push lower in USD.
EUR/USD
We have been highlighting that we expect this pair to test the 1.3220 mark and its recent run to test the 1.3200 mark was good to see . The pair could drop lower from here but there are a few signs pointing to the potential for further gains.
Ichimoku lines are now close to crossing pointing to further upside (although currently they are level), COT report positioning came off of lowers to move higher and Retail Order book is still pushing for shorts.
Our inhouse Order book systems continue to like EUR/USD longs but it is pretty close to switching. We maintain our short term Bullish/Long Term Bearish outlook, but a push past the 1.3200 level could swing this view ot a more Bullish stance.
Personal Bias: Short term Bullish / Long Term Bearish
Support: 1.3050 / 1.3100
Resistance: 1.3180 / 1.3240
Strategy: Wait for clear signals of price rejections off of key levels.
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