Dollar surges as week, month and quarter come to an end

The US dollar certainly enjoys the adjustments made towards the end of the week, month and quarter. The late Friday sessions are always choppier as traders scramble to close positions, and this one is even stronger, as also we turn the page also on the month, quarter and the half if you wish. 

The upwards revision of consumer confidence also contributed, but what we are seeing is mostly a renewal of the tapering move. The action isn’t over yet.

While the dramatic talk about tapering QE on June 19th certainly gave the dollar a boost, the former part of the month wasn’t that great: the dollar was on the back foot. After some consolidation of the big Bernanke move, the US dollar is now marching forward.

• EUR/USD is back down towards 1.30 after getting very close to 1.30.
• USD/JPY is holding to 99. The pair enjoyed the rises in the Japanese stock market.
• GBP/USD dipped below 1.52. The pound is still suffering from a significant GDP revision for the year-on-year figure.
• AUD/USD fell to a new multi-year low, renewing the general bearishness. The Aussie certainly has reasons to go down under.
• USD/CAD was already falling on continued Canadian growth, but it is now battling 1.05 once again.
• NZD/USD is below 0.77, close to the lows.

The next week is a very busy one, top tier US figures that all serve as a build up to the Non-Farm Payrolls. See the updated weekly forex forecast for all the details.

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AUD/USD breaks down to new multi-year low on month end madness

The recovery is over for the Aussie dollar: AUD/USD plunged to a new 33 month low of 0.9133 as the week, month and quarter come to an end.

Where to next? The 0.90 line is not that far. With all the bearish forecasts on the Aussie dollar, on China and on the global economy, the pair could challenge this line as early as next week.

The previous break down followed the FOMC statement:Bernanke talked about tapering and this pushed AUD/USD to a low of 0.9163. It then recovered and even recaptured 0.93. However, it couldn’t hold on to its gains and now the downfall accelerates on adjustments that happen at the end of periods.

The US dollar also got a small boost from consumer confidence: the revised version of the University of Michigan’s figure was higher than the original publication: 84.1 instead of 82.7. It was also better than 83.1 expected.

Here is how it looks on the weekly chart:

Next week, the RBA convenes for its monthly rate decision. A “no change” decision is anticipated. The RBA began the avalanche by cutting the rates in May. The strong Aussie was one of the reasons for the crash. With the Aussie at its current shape, there is no need for further action.

Will the RBA choose to take the other direction and try to lift the Aussie? Probably not.

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Canadian GDP Rises 0.1% as expected

Canada’s GDP grew by 0.1%, within expectations. This was the release for the month of April – the first report  for Q1 2013. Canada is apparently growing slowly like the US is.

USD/CAD traded just under 1.05 before the publication and is now sliding a bit lower below 1.0480.

The loonie fell after the big tapering announcement by Bernanke and the subsequent weak retail sales and CPI reports in Canada. The continued growth, even if unsurprising, supports the Canadian dollar.

The Raw Materials Price Index rose by 0.2%, below expectations of +0.5%. The IPPI remained flat. In March, the economy grew by 0.2%. The next big Canadian event is the release of the jobs report next Friday. They jumped 95K last month.

Support appears at 1.0446, and resistance is at 1.0523

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EUR/USD June 28 – Steady as German Retail Sales Shines

EUR/USD is trading in the mid-1.30 range on Friday. In economic releases, German Retail Sales and French Consumer Spending easily beat their estimates. However, French PPI was well below expectations. US releases continue to be positive, as Unemployment Claims were very close to the estimate and Pending Home Sales sparkled, hitting a multi-year high. Today’s highlight is US UoM Consumer Sentiment Index.

Here is a quick update on the technical situation, indicators, and market sentiment that moves euro/dollar.

EUR/USD Technical

• Asian session: Euro/dollar showed some movement, touching a high of 1.3072 and consolidating around 1.3050. The pair is unchanged in the European session.

Current range: 1.3050 – 1.3100.

Further levels in both directions: 

• Below: 1.3050, 1.30, 1.2940, 1.2890, 1.2840, 1.28, 1.2750 and 1.27.
• Above: 1.31, 1.3160, 1.32, 1.3255, 1.3350, 1.34, 1.3434 and 1.3480.
• 1.31 is providing resistance. 1.3160 is stronger.
• On the downside, the pair is testing 1.3050. This is followed by the important level of 1.30.

Euro trading in mid-1.30 range after positive German numbers – click on the graph to enlarge.

EUR/USD Fundamentals

• 6:00 German Retail Sales. Exp. -0.2%. Actual 0.8%.
• 6:45 French Consumer Spending. Exp. -0.1%. Actual 0.5%.
• 6:45 French PPI. Exp. -0.3%. Actual -1.2%.
• 12:00 US FOMC Member Jeremy Stein Speaks.
• 13:45 US Chicago PMI. Exp. 56.0 points.
• 13:55 US UoM Consumer Sentiment. Exp. 82.8 points.
• 13:55 US UoM Inflation Expectations.

For more events and lines, see the Euro to dollar forecast

EUR/USD Sentiment

• Draghi says ECB’s accommodative stance to continue: Earlier this week, ECB President Mario Draghi spoke in Paris to the French parliament. Draghi reiterated that the ECB’s monetary policy would remain accommodative for the time being. He said that he expects the Eurozone to recover in the second half of 2013, but that the recovery would be “gradual but fragile”. The markets have heard these comments from Draghi and other ECB policymakers before, but based on the economic data we are seeing from the Eurozone, there is skepticism if the economy in Europe will indeed improve in the near future.
• US Posts Solid Numbers: It’s been an excellent week for US releases. It’s  been a very good week for US releases. Earlier this week, there were solid readings from Core Durable Goods, CB Consumer Confidence and New Home Sales. Manufacturing data, often a sore spot, also looked good as the Richmond Manufacturing Index had its best performance since last November. There was more good news on Thursday. Unemployment claims fell to 346 thousand, just below the estimate of 347 thousand. Pending Home Sales skyrocketed, posting a gain of 6.7%, its highest since 2006. This crushed the estimate of a 1.1% gain. Although GDP fell short of the estimate, the dollar did not lose ground. These solid numbers are particularly encouraging as they come from a wide range of economic sectors, and could signify that the US recovery is deepening.
• Fed Backtracking on QE?: After Federal Reserve Chair Bernard Bernanke said last week that the Fed was planning to scale down QE, the US dollar surged. However, global stock markets, including those in the US, fell sharply on the news, and the Fed assigned two Federal Reserve Presidents to manage damage control. Dallas’ Richard Fisher declared that “tapering” should not be confused with “tightening” and said that the Fed was not exiting from its accommodative policy action just yet. Minneapolis’ Naraya Kocherlakota reiterated that the Fed was continuing with an expansionary monetary policy event if QE was terminated, and said that the Fed had not turned more hawkish. One could be forgiven for dismissing these statements as little more than linguistic acrobatics, and it’s questionable if the markets will be reassured by these statements, which were clearly aimed at calming nervous investors.
• German data shows improvement: The week did not start off well for German releases, as German Ifo Business Climate, a key indicator, came in slightly below the estimate. However, there was better news as the week progressed. German Consumer Climate hit a six-year high, while German Unemployment Claims came in well below the estimate. On Friday, German Retail Sales jumped 0.8%, surprising the markets which had anticipated a 0.2% decline. Germany is the largest economy in the Eurozone, and the “locomotive of Europe” will have to supply additional positive releases if the Eurozone is to get back on its economic feet.

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U.S stocks drop on June rebalance, Fed comments; Dow dips 0.76%

U.S. stocks ended largely lower Friday due to a June rebalancing of the Russell Index and to mixed signals from Federal Reserve officials suggested that stimulus programs may stay in place for now but end later this year.

At the close of U.S. trading, the Dow Jones Industrial Average finished down 0.76%, the S&P 500 index ended down 0.43%, while the Nasdaq Composite index rose 0.04%.

Each June, the Russell Index rebalances its list of investible stocks, which tends to fuel volatility, especially on the last trading day of the quarter.

Earlier Friday, Federal Reserve Governor Jeremy Stein suggested that asset purchases may begin to taper in September provided the economy improves, which boosted stocks earlier.

"The best approach is for the Committee to be clear that in making a decision in, say, September, it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting — as salient as these releases may appear to be to market participants," Stein said, according to prepared remarks in a speech he gave earlier.

Separately, San Francisco Federal Reserve President and noted inflation dove John Williams said that it was still too early to scale back stimulus tools yet, though stocks rose earlier on the notion that liquidity injections from asset purchases will keep stocks high, and by the time the Fed begins to scale back, better economic fundamentals will support equities.

However, Federal Reserve Bank of Richmond President Jeffrey Lacker said markets will experience more volatility while figuring out what the Fed will do, which added to the day's  declines.

Elsewhere, the Thomson Reuters/University of Michigan consumer sentiment index rose to 84.1 for a final reading in June, up from a 82.7 reading the previous month and also above expectations for a 82.8 reading. 

The upbeat numbers came in wake of a report that revealed that the Chicago purchasing managers' index fell to 51.6 this month from 58.7 in May, exceeding expectations for a decline to 56.0.

Any reading over 50 signifies expansion, which fueled demand for stocks during the volatile session. 

Leading Dow Jones Industrial Average performers included Home Depot, up 1.13%, Intel, up 0.87%, and Hewlett-Packard, up 0.16%.

The Dow Jones Industrial Average's worst performers included IBM, down 2.35%, DuPont, down 2.00%, and Merck, down 1.65%.

European indices, meanwhile, finished lower.

After the close of European trade, the EURO STOXX 50 fell 0.66%, France's CAC 40 fell 0.62%, while Germany's DAX 30 finished down 0.39%. Meanwhile, in the U.K. the FTSE 100 finished down 0.45%.

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Forex - Dollar gains on Fed comments, consumer sentiment data

Rising U.S. consumer sentiment data and comments from a Federal Reserve governor suggesting monetary stimulus tools may taper in September sent the dollar strengthening against most of its counterparts Friday.

Monetary stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling often firms the greenback.

In U.S. trading on Friday, EUR/USD was down 0.23% at 1.3010.

The Thomson Reuters/University of Michigan consumer sentiment index rose to 84.1 for a final reading in June, up from a 82.7 reading the previous month and also above expectations for a 82.8 reading. 

The upbeat numbers came in wake of a report that revealed that the Chicago purchasing managers' index fell to 51.6 this month from 58.7 in May, exceeding expectations for a decline to 56.0.

Any reading over 50 signifies expansion, which left investors feeling at ease in dollar positions Friday. 

Elsewhere in the U.S., Federal Reserve Governor Jeremy Stein suggested earlier that asset purchases may begin to taper in September provided the economy improves, which also boosted the dollar.

"The best approach is for the Committee to be clear that in making a decision in, say, September, it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting — as salient as these releases may appear to be to market participants," Stein said, according to prepared remarks in a speech he gave earlier.

Meanwhile in the eurozone, official data showed that German retail sales rose 0.8% in May, beating expectations for a 0.2% gain after a 0.1% contraction the previous month, though U.S. events served as the market's chief steering current.

The greenback was up against the pound, with GBP/USD trading down 0.38% at 1.5201.

In the U.K., house price inflation rose 0.3% this month, in line with expectations after a 0.4% gain in May.

The dollar was up against the yen, with USD/JPY up 0.94% at 99.28, and flat against the Swiss franc, with USD/CHF trading down 0.01% at 0.9450.

Japan's manufacturing purchasing managers' index rose to 52.3 in June from 51.5 in May, the index's fastest expansion in almost two years. 

A separate report showed that industrial production in Japan rose 2% in May, exceeding expectations for a 0.2% rise after a 0.9% increase a month earlier. 

In addition, housing starts in Japan jumped 14.5% in May, far more than the expected 6.2% increase after a 5.8% rise the previous month.

Investors, however, opted for the dollar over the yen in wake of U.S. consumer sentiment numbers and Stein's comments.

The dollar was up against its cousins in Canada, Australia and New Zealand, with USD/CAD up 0.27% at 1.0505, AUD/USD down 1.41% at 0.9145 and NZD/USD trading down 0.68% at 0.7742.

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.29% at 83.41.

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Forex - USD/JPY gains on Fed comments, U.S. consumer sentiment data

The dollar traded higher against the yen on Friday despite a slew of Japanese economic indicators that beat expectations.

Hawkish comments from a Federal Reserve governor and rising U.S. consumer sentiment data bolstered the dollar's appeal by supporting expectations for an end to ultra-loose monetary policies later this year.

In U.S. trading on Friday, USD/JPY was trading at 99.25, up 0.91%, up from a session low of 98.35 and off a high of 99.45.

The pair was likely to find resistance at 99.45, the earlier high, and support at 98.35, the earlier low.

The Thomson Reuters/University of Michigan consumer sentiment index rose to 84.1 for a final reading in June, up from a 82.7 reading the previous month and also above expectations for a 82.8 reading. 

The upbeat numbers came in wake of a report that revealed that the Chicago purchasing managers' index fell to 51.6 this month from 58.7 in May, exceeding expectations for a decline to 56.0.

Any reading over 50 signifies expansion, which left investors at ease to seek out dollar positions. 

Elsewhere in the U.S., Federal Reserve Governor Jeremy Stein suggested earlier Friday that asset purchases may begin to taper in September provided the economy improves, which further boosted the dollar.

Better-than-expected U.S. economic indicators often send the dollar rising by fanning already growing expectations for the Federal Reserve to taper stimulus programs in the coming months.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, and talk of their dismantling sends the dollar rising.

The yen, meanwhile, traded lower against its U.S. counterpart despite bullish data at home.

Japan's manufacturing purchasing managers' index rose to 52.3 in June from 51.5 in May, the index's fastest expansion in almost two years. 

A separate report showed that industrial production in Japan rose 2% last month, exceeding expectations for a 0.2% rise after a 0.9% increase in April. 

In addition, housing starts in Japan jumped 14.5% in May, far more than the expected 6.2% increase after a 5.8% rise the previous month.

The yen, meanwhile, was down against the pound and down against the euro, with GBP/JPY up 0.56% and trading at 150.92 and EUR/JPYtrading up 0.71% at 129.14.

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Crude oil gains on rising U.S. consumer sentiment

Crude prices rose in rather subdued trading on Friday, buoyed by rising consumer sentiment numbers in the U.S., which reflected an improving economy that will demand more fuels and energy going forward.

Comments from a Federal Reserve governor suggesting an end to monetary stimulus programs starting in September quieted trading as investors digested the news.

On the New York Mercantile Exchange, light sweet crude futures for delivery in August traded up 0.27% at USD97.31 a barrel on Friday, off from a session high of USD97.82 and up from an earlier session low of USD96.55.

The Thomson Reuters/University of Michigan consumer sentiment index rose to 84.1 for a final reading in June, up from a 82.7 reading the previous month and also above expectations for a 82.8 reading. 

The upbeat numbers came in wake of a report that revealed that the Chicago purchasing managers' index fell to 51.6 this month from 58.7 in May, exceeding expectations for a decline to 56.0.

Any reading over 50 signifies expansion, which left investors feeling at ease to seek out growth-sensitive energy positions. 

Elsewhere in the U.S., Federal Reserve Governor Jeremy Stein suggested earlier Friday that asset purchases may begin to taper in September provided the economy improves, which boosted the dollar and swayed a few investors away from oil.

"The best approach is for the Committee to be clear that in making a decision in, say, September, it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting — as salient as these releases may appear to be to market participants," Stein said, according to prepared remarks in a speech he gave earlier.

Stimulus tools such as a monthly USD85 billion bond-buying program tend to push oil up as a side effect by weakening the greenback, which makes the commodity attractive in dollar-denominated exchanges.

On the ICE Futures Exchange, Brent oil futures for August delivery were up 0.15% at USD102.98 a barrel, up USD5.67 from its U.S. counterpart.

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Forex Trading Signal for 28th June 2013

                                                                                


Japan (Tokyo)                               United Kingdon (London)                        USA (New York)

For more easy access,,,,,,Download our mobile application on your mobile :   Click Fxsignals 

EUR/USD

 Up Trend :

 (1) BUY

E/P: 1.30347

T/P: 1.30700

S/L: 1.29900

 ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

GBP/USD

Down Trend:

(1) SELL

E/P: 1.52642

T/P: 1.52000

S/L: 1.53100

  ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

USD/JPY

Up Trend:

(1) BUY

E/P: 98.154

T/P: 98.400

S/L: 97.700

  ,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

USD/CHF

Up Trend:

(1) BUY

E/P: 0.94498

T/P: 0.94800

S/L: 0.94000

NOTE: The above posted Signals are delayed 2 - 4 hours after it has been  generated.
Daily forex signals are sent ontime to only our subcribers.

To subcribe: click here

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Dollar remains broadly higher after U.S. data

The U.S. dollar remained broadly higher against the other major currencies on Friday, as the release of globally positive U.S. data added to expectations for the Federal Reserve to scale back its bond-buying program before the year end. 

During U.S. morning trade, the dollar was higher against the euro, withEUR/USD slipping 0.18% to 1.3015. 

The greenback strengthened broadly after the University of Michigan said that its consumer sentiment index rose to 84.1 in June, from a reading of 82.7 the previous month, beating expectations for a rise to 82.8. 

The data came after a report showed that the Chicago purchasing managers' index fell to 51.6 this month, from 58.7 in May, exceeding expectations for a decline to 56.0 but still remaining in expansion territory. 

In the euro zone, official data showed that German retail sales rose 0.8% in May, beating expectations for a 0.2% gain, after a 0.1% fall the previous month. 

The greenback was also higher against the pound, with GBP/USDshedding 0.38% to 1.5201. 

The U.K. Gfk consumer confidence index improved to minus 21 in June, from a reading of minus 22 the previous month, in line with expectations.

A separate report showed that house price inflation rose 0.3% this month, as expected, after a 0.4% rise in May. 

Elsewhere, the greenback was higher against the yen, with USD/JPYadvancing 0.74% to trade at 99.10, and steady against the Swiss franc with USD/CHF easing 0.04% to 0.9446. 

Markit said Japan's manufacturing purchasing manager's index rose to 52.3 this month, from a reading of 51.5 in May, posting its fastest growth in almost two years. 

A separate report showed that industrial production in Japan rose 2% last month, exceeding expectations for a 0.2% rise, after a 0.9% increase in April. 

In addition, housing starts in Japan jumped 14.5% in May, far more than the expected 6.2% increase, after a 5.8% rise the previous month. 

In Switzerland, the KOF index of leading indicators rose to 1.16 in June, from 1.09 the previous month, disappointing expectations for a rise to 1.19. 

The greenback was higher against its Canadian, Australian and New Zealand counterparts, with USD/CAD edging up 0.23% to 1.0501,AUD/USD tumbling 1.13% to 0.9173 and NZD/USD declining 0.64% to 0.7746. 

Official data showed that Canada's gross domestic product expanded 0.1% in April, compared to expectations for a flat reading, after a 0.2% expansion the previous month. 

A separate report showed that Canada's raw materials purchase index rose 0.2% in May, disappointing expectations for a 1% increase, after a 2.2% decline the previous month. 

The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.27% to 83.39. 

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Forex - Pound hits 3-week lows against broadly stronger dollar

The pound dropped to three-week lows against the U.S. dollar on Friday, as U.S. economic reports sent the greenback broadly higher, while concerns over the outlook for growth in the U.K. persisted. 

GBP/USD hit 1.5188 during U.S. morning trade, the pair's lowest since May 31; the pair subsequently consolidated at 1.5190, shedding 0.45%. 

Cable was likely to find support at 1.5140, the low of May 31 and resistance at 1.5279, the session high. 

In a revised report, the University of Michigan said that its consumer sentiment index rose to 84.1 in June, from a reading of 82.7 the previous month, beating expectations for a rise to 82.8. 

The data came after a report showed that the Chicago purchasing managers' index fell to 51.6 this month, from 58.7 in May, exceeding expectations for a decline to 56.0 but still remaining in expansion territory. 

The greenback also gained ground after a Federal Reserve official highlighted the central bank's upcoming September policy meeting as a possible time when it may need to consider paring back its quantitative easing program. 

In the U.K., the Gfk consumer confidence index improved to minus 21 in June, from a reading of minus 22 the previous month, in line with expectations. 

A separate report showed that house price inflation rose 0.3% this month, as expected, after a 0.4% rise in May. 

The data came a day after the Office of National Statistics said U.K. gross domestic product expanded at an annual rate of 0.3% in the three months to March, down from a preliminary estimate of 0.6% growth. 

Sterling was lower against the euro with EUR/GBP rising 0.25%, to hit 0.8567. 

Also Friday, official data showed that German retail sales rose 0.8% in May, beating expectations for a 0.2% gain, after a 0.1% fall the previous month. 

In France, official data showed that consumer spending rose 0.5% in May, confounding expectations for a 0.1% fall, after a 0.5% decline the previous month.

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Forex - EUR/USD erases gains after U.S. data

The euro erased gains against the U.S. dollar on Friday, as fresh expectations for the Federal Reserve to soon begin to taper its stimulus program supported demand for the greenback following the release of U.S. data. 

EUR/USD pulled away from 1.3103, the pair's highest since June 25, to hit 1.3018 during U.S. morning trade, slipping 0.14%. 

The pair was likely to find support at 1.2985, the low of June 2 and resistance at 1.3103, the session high. 

In a revised report, the University of Michigan said that its consumer sentiment index rose to 84.1 in June, from a reading of 82.7 the previous month, beating expectations for a rise to 82.8. 

The data came after a report showed that the Chicago purchasing managers' index fell to 51.6 this month, from 58.7 in May, exceeding expectations for a decline to 56.0 but still remaining in expansion territory. 

Also Friday, a Fed official highlighted the central bank's upcoming September policy meeting as a possible time when it may need to consider paring back its quantitative easing program. 

In the euro zone, official data showed that German retail sales rose 0.8% in May, beating expectations for a 0.2% gain, after a 0.1% fall the previous month. 

In addition, official data showed that consumer spending in France rose 0.5% in May, confounding expectations for a 0.1% fall, after a 0.5% decline the previous month. 

The euro was higher against the pound with EUR/GBP adding 0.16%, to hit 0.8559. 

Earlier in the day, the U.K. Gfk consumer confidence index improved to minus 21 in June, from a reading of minus 22 the previous month, in line with expectations. 

A separate report showed that house price inflation rose 0.3% this month, as expected, after a 0.4% rise in May.

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US jobless claims slide to 346K – in line with expectations

Weekly jobless claims dropped to 346K in the week of June 22 2013. They were expected to slide from 355K last week (revised from 355K) to 347K this time. Continuing claims were predicted to remain almost unchanged at around 2.95 million. The drop under 3 million was an important advance in the economic situation. They suffered a small rise to 2.965 million now.

EUR/USD was steady around 1.3030 and USD/JPY held on to high ground at 98.20.

Personal spending rose by 0.3%, exactly as expected, but the figure for the previous month was revised to the downside: from -0.2% to -0.3%. Core PCE Price Index rose by 0.1% as expected and personal income surprised by rising 0.5%, more than 0.2% expected and this figure also enjoyed an upwards revision of the previous figure: from flat to +0.1%.

All in all, this bulk of data doesn’t contain big surprises: most figures are in line with predictions. The general picture of a slow and steady / frustrating growth continues.

Currencies aren’t moving too much. Next in the US: pending home sales at 14:00 GMT.

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