The dollar traded mixed on Thursday following yesterday's Fed downgrade of the US economic outlook. US May durable goods orders declined for the first time in six months and initial jobless claims decreased slightly more than expected. The dollar index reversed earlier losses after a successful test of the 85-area support.

The S&P 500 fell 18.35 to 1,073.69. The euro was up modestly despite widening credit spread in troubled PIIGS. Unable to penetrate the important 1.50 resistance, the GBP/USD was down modestly. After the ruling Labor Party named Julia Gillard Australia's first female Prime Minister, the Australian dollar had a brief rally but later fell. The USD/CAD was up for a fourth straight day but unable to penetrate the 1.0450-area resistance.

The USD/JPY fell for a third consecutive day. After breaking its uptrend yesterday, the pair is declining in a tentative trading channel and likely to test the 88.50 support. If this is broken, there may be a lower trading band in the 87 area. Resistance is in the 91 area.

Financial and Economic News and Comments

US & Canada

US durable goods orders fell 1.1% to $192.0 billion in May, the first fall in six months, after an upwardly revised 3.0% m/m gain in April, according to data from the Commerce Department. Excluding transportation, durable goods orders increased 0.9% m/m to $145.1 billion, the third advance in four months, following April's revised 0.8% m/m decrease. The May numbers were roughly in line with forecasts. Durable goods orders rose 15.3% y/y nsa in May; ex-transportation orders rose 18.3% y/y nsa. Shipments of non-defense capital goods excluding aircraft, used in calculating GDP, increased 1.6% m/m in May after no change in April.

US initial jobless claims in the week ending June 19 fell 19,000 to a lower-than-expected 457,000 from the previous week's upwardly revised 476,000, figures from the Labor Department showed, pointing to a gradual improvement in the US labor market. The 4-week moving average declined 1,500 to 462,750. Continuing claims in the week ending June 12 dropped 45,000 to 4,548,000 from the preceding week's upwardly revised 4,593,000. The 4-week moving average of those continuing claims decreased 21,750 to 4,586,500. The insured unemployment rate for the week ending June 12 declined to 3.5% from the prior week's 3.6%.

Europe Eurozone industrial new orders grew a less-than-expected 0.9% m/m sa in April, a third consecutive month-onmonth advance, after a downwardly revised 5.1% m/m increase in March, according to data from Eurostat. April industrial new orders rose 22.1% y/y nsa, a fifth straight year-on-year rise, following an upwardly revised 20.3% y/y March gain.

Asia-Pacific New Zealand's GDP grew 0.6% q/q in Q1 2010, a fourth consecutive quarterly expansion, after an upwardly revised 0.9% q/q gain in Q4 2009, GDP data from Statistics New Zealand showed. Q1 growth was led by a 1.6% q/q advance in manufacturing activity and a 1.4% q/q increase in wholesale trade activity. The Q1 GDP rose 1.9% y/y, following an upwardly revised 0.5% y/y Q4 rise. The Q1 numbers were in line with expectations. Japan's trade surplus rose 15.2% y/y nsa to ¥324.2 billion ($3.6 billion) in May, smaller than expected, from ¥281.4 billion in May 2009, according to figures from the Ministry of Finance. Exports climbed 32.1% y/y nsa to ¥5.3 trillion in May, a sixth straight year-on-year advance but less than a 40.4% y/y April gain. Imports rose 33.4% y/y nsa to ¥4.99 trillion, a fifth successive year-on-year rise and larger than a 24.2% y/y April increase. Seasonally adjusted, the trade surplus totaled ¥416.1 billion in May. Japanese corporate service prices fell 0.8% y/y in May, a 20th straight year-on-year fall, after a 1.1% y/y decrease in April, data from the Bank of Japan showed. May corporate service prices slipped 0.1% m/m, registering a second consecutive month-on-month decline.

The Conference Board Australian leading economic index, a measure of future economic activity, was up 0.1% m/m to 115.3 in April after a 0.3% m/m advance in March, the Conference Board reported. The April LEI modest gain was led by the sales to inventories ratio, the yield spread, money supply, and gross operating surplus. However, building approvals, rural goods exports, and share prices fell. The coincident economic index, measuring present economic activity, was up 0.1% m/m to 114.9 in April following a 0.2% m/m March increase.

FX Strategy Update

 
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
EUR/JPY

Primary Trend
Negative
Neutral
Negative
Positive
Negative
Neutral
Negative

Secondary Trend
Negative
Positive
Negative
Positive
Neutral
Negative
Negative

Outlook
Negative
Positive
Negative
Neutral
Positive
Negative
Negative

Action
Short
None
None
None
Buy
None
None

Current
1.2328
89.53
1.4927
1.1019
1.0432
0.8665
110.37

Start Position
1.4628
N/A
N/A
N/A
1.0247
N/A
N/A

Objective
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Stop
1.2680
N/A
N/A
1.1100
1.0075
N/A
N/A

Support
1.2150
89.50
1.4800
1.1000
1.0200
0.8500
110.00

1.1900
87.00
1.4450
1.0850
0.9900
0.8100
108.00

Resistance
1.2400
91.00
1.5000
1.1400
1.0450
0.8800
114.00

1.2550
93.50
1.5350
1.1700
1.0750
0.9000
120.00

 
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
EUR/JPY

Primary Trend
Negative
Neutral
Negative
Positive
Negative
Neutral
Negative

Secondary Trend
Negative
Positive
Negative
Positive
Neutral
Negative
Negative

Outlook
Negative
Positive
Negative
Neutral
Positive
Negative
Negative

Action
Short
None
None
None
Buy
None
None

Current
1.2328
89.53
1.4927
1.1019
1.0432
0.8665
110.37

Start Position
1.4628
N/A
N/A
N/A
1.0247
N/A
N/A

Objective
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Stop
1.2680
N/A
N/A
1.1100
1.0075
N/A
N/A

Support
1.2150
89.50
1.4800
1.1000
1.0200
0.8500
110.00

1.1900
87.00
1.4450
1.0850
0.9900
0.8100
108.00

Resistance
1.2400
91.00
1.5000
1.1400
1.0450
0.8800
114.00

1.2550
93.50
1.5350
1.1700
1.0750
0.9000
120.00

Expert Market Commentaries, charts and information are provided by Hans Nilsson of Globicus International, Inc., a registered third party CTA, are intended for educational purposes only and do not constitute trading recommendations.

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