The Dollar traded weaker overnight giving up most of yesterday's gains as Asian equities rebounded. However with US stocks remaining under pressure and Euro Zone peripheral risks resurfacing the Dollar may resume its strength across the board as safe haven appetite comes back. Weekly Jobless Claims caused concern again at 484 vs. 465k and is creeping higher in recent weeks. The DJIA traded down -58 points closing at 10320 and the S&P traded down -5 indicating fear over the pace of US economic growth. Looking ahead, July Retail Sales are expected to come in at 0.5% vs.-0.5% previously. Also released, August Consumer Confidence forecast at 69.3 vs. 67.8 previously. USDJPY price action yesterday was between 84.93 - 86.18.
European banking concerns remained in the spotlight as well as renewed fears over the funding abilities of EU peripheral economies such as Ireland and lower than expected GDP growth for Greece which spooked the markets. As fears intensified Euro crosses were sold across the board whilst the JPY, CHF and USD benefited due to safe haven demand. EUR/JPY was volatile on Japanese intervention fears but a rally in Asia was sold aggressively in Europe after weak economic data. June Industrial Production fell -0.1% vs. 0.7% forecast. EUR/USD traded with a low of 1.2781 and a high of 1.2934 before closing at 1.2830. Looking ahead, Q2 German GDP forecast at 1.3% vs.0.2% previously and Q2 EU GDP forecast at 0.7% vs. 0.2% previously.
Currency to watch out for: EURUSD & USDJPY
- The EURUSD pivot point is at 1.2900 with a preference to enter into Short positions at 1.2890
- The USDJPY pivot point is at 85.75 with a preference to enter Long positions at 85.80
Today's calendar and market movers:
- Germany GDP Q2 is forecasted at 1.3%
- Euro Zone GDP for Q2 is forecasted at 0.7%
- United States Retail Sales for July is expected at 0.5%
- Michigan Sentiment for August is expected at 69.3
US equities closed negative yesterday with the S&P500 at -0.54% and the DJIA at -0.57%. The European bourses were mixed with the FTSE up 0.4% the DAX and the CAC closing at -0.31% and -0.20% respectively. The NIKKEI and the HSI at the time of writing is 0.47% and 0.07% respectively.