Littlefish FX | May 18, 2015 08:12AM ET
CFTC COT DATA:
EUR/USD – Outlook Bearish
Another solid week for the single currency. We saw price punch through last week’s highs to challenge the 1.14 handle as US retail sales failed to reignite the USD bulls, with the continued rise in European yields adding support also. German GDP came in slightly below forecast whilst CPI came in slightly above and Eurozone GDP came in in-line. Again, last week we saw EUR/USD’s rise, a case of benefiting from USD weakness rather than fresh EUR strength
GBP/USD – Outlook Bearish
Continued to strengthen last week as the UK benefits from investor flow on the back of the (business friendly) Conservative party’s majority return to government. We saw some GBP selling as the BoE cut its 2015 growth forecast from 2.9%-2.5%, but a surprise increase in service sector wages helped support the UK currency with the first rate increases set to take place in Q2 2016. This week, CPI data is the headline event, bringing the risk that we dip into deflation for the first time since 1989, which would considerably undermine GBP’s recent strength.
USD/JPY – Outlook Bullish
Weakened against the majors but still remaining firmly range-bound against the USD, with some initial strength as improvements in Japan’s external account surplus prompted USD/JPY selling. This range is likely to remain so long as we don’t see any more easing from the BoJ or any data surprises out of the US.
USD/CHF – Outlook Bearish
Weekly sight deposits up by another CHF2bn to now CHF452.5b. This suggests that the SNB has bought another CHF2bn worth of foreign currency, putting the total in recent weeks to about CHF9bn. So far, the market has taken evidence of intervention as a EUR/CHF positive. However, the apparent ‘leaning against the wind’ could ultimately risk speculative money betting the other way if the central bank approach is seen as weak.
AUD/USD – Outlook Bearish
A whipsaw week for the Australian currency, as we saw price rise through highs only to be met by strong macro fund supply, sending price right back down. It’s high beta status makes it a favourite for short USD plays, and markets are pricing out expectations of a further RBA rate cut this year. As with EUR, upside room appears limited to tactical advancement only, in lieu of resumed USD strength. A slowdown in Chinese growth also hampers the Aussie’s trading outlook.
USD/CAD Outlook – Bullish
Canadian data has continued to upstage that of its famous neighbour and with the BoC on hold, flows have been supportive again this week. The distressed oil sector in the country remains an issue. Canadian CPI is next on watch, and it will be interesting to see if again we see Canada come in above the US, which would push price through the recent 1.1918 low
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.