Coming Up today (all times GMT)

  •     GBP April Retail Sales  (0:830)
  •     USD Weekly Unemployment Claims (12:30)
  •     USD Philly Fed Manufacturing Index (14:00)

Asian equities headed lower on Thursday, as Japan's growth figure came lower than analysts had expected, and coupled with fears that the euro-area debt problems will spread, has had a negative impact on overall market sentiment. In other news, Chinese officials have expressed their concern about the global impact of the European fiscal issue, and have made it clear that the United States should take steps to improve their own fiscal picture. Chinas is the biggest holder of U.S. debt, with its holding just under $1 trillion, has every incentive to protect its investment and put pressure on the U.S. to take appropriate steps in that direction.


The pair experienced re-newed weakness today, as many investors saw yesterday's rise above $1.2400 as an opportunity to establish new short positions. On Wednesday, the euro jumped by more than 1.5% against the greenback, from around $1.2140 to approximately $12440. It is likely that short covering had exarcebated an already oversold euro, helping it climb higher more aggressively. However, fundamentally, the euro still seems weak as nothing has really changed. Added to this, central banks and institutional investors around the world have been slowly switching from euro holdings into more yen and dollar holdings in their portfolios. Wednesday's spike higher, would have been a good opportunity to substitute more euro holdings into other assets.

Support/Resistance 1.2324/1.2384


Cable has also moved higer along with the EURUSD on Wednesday to nearly $1.4470, to give some gains back overnight and stabilize around $1.4380 on Thursday. On the fundamentals front, today's UK Retail Sales for April will give a clearer picture on the extent of the economic recovery, and any surprises on the figure could have an impact on the pair.

Support/Resistance 1.4370/1.4423


The precious metal retraced back from losses on early Wednesday trading, when it dipped just below $1190/oz, to later climb higher close to the $1200/oz level. It seems, that the correction exhibited recently could be reaching a halt, with some intraday technical indicators showing oversold conditions. With global equities heading steadily lower, there could be some catching up for gold to do, in terms of the risk aversion play. In other news, the FOMC minutes on Wednesday showed that members are in no rush to start selling assets back to the market, indicating a more loose monetary policy. This could be perceived as being potentially more inflationary for the medium run, and hence could benefit gold prices.

Support/Resistance 1190/1208