Forex News

Forex − Tentative calls for a bottom fail to convince the broader market

Forex News And Events:

U.S retail sales weakened by 1.1% Y/Y yesterday which sent U.S stock markets lower. While a recovery in the U.S economy could be too early to call, some say the Stock markets will be ahead of the curve on this as economic data is backward looking. While many analysts are calling EURUSD long and a return of risk appetite we see a return of risk averse trades pushing the Yen and dollar higher. Volatility has made a comeback as we settle into broad ranges which we will only break out of once we have a firm grip on the direction of the global economy.

Focus now is on how currencies will price the earnings and economic data to come, however sentiment will be a very big factor to this – the dollar remains a firm choice for a haven but waning demand and strong risk appetite could reverse this momentum. In terms of the EURUSD we don’t see a turn around in the broad bear trend before we re-test 1.2600 – 1.2500 levels (historic fair-value). We have highlighted this on our graph.

Ahead today, CPI for march is due at 12:30 GMT and the market expects an increase of 0.1% compared with 0.4% in February. Other releases include the TIC report for February, the NAHB housing market index for April and the Fed’s Beige Book.

Today's Key Issues (Time In GMT):

12:30 USD Consumer Price Index (MoM) 0.1% vs. 0.4%

12:30 USD Consumer Price Index (YoY) -0.1% vs. 0.2%

12:30 USD Empire Manufacturing -35.00 vs. -38.23

13:00 USD TIC Flows 10.0B vs. -43.0B

18:00 USD Fed’s Beige Book.

The Risk Today:

EurUsd Broad bearish trend resumes (momentary lapse in corrective bull) and even gains momentum as risk appetite wanes on weaker U.S retail sales. Initial resistance stands at 1.3335 (early April head-shoulder neckline) then 1.3395 (recent April 13th high). 1.3459 is the crucial intersection between the broad trend’s (see graph) upper extremity and week’s end on the 17th, any test of this level would constitute a break from the current broad trend. On the downside we see an initial support at 1.3207 (61.80% retracement on 1.3089 – 1.3395 move) which sets the stage for 1.3118. Long term view sees the pair heading for 1.2500 – 1.2600 territory before a sustainable turnaround in the broad trend.

GbpUsd We are looking at a 4 figure range contained within 1.4963 and 1.4587 (recent double highs and lows of April). Rally started April 12th culminates at 1.4955 which is out initial resistance. On the downside, 1.4818 (38.20% retracement) sets the tone for 1.4777 support which in turn allows us to target 1.4606 low on April 12th. Return to risk averse trades would push the dollar higher as it’s haven status persists however a test higher isn’t to be discounted as we see Sterling resist recent dollar moves.

UsdJpy Pair fails on 61.80% retracement support line at 98.09, 98.41 stands as initial soft support, while a break below the 61.80% level would aim for March 30th low of 95.96. On the upside resistance comes at 99.40 but a test at 100.77 would allow us to retest recent highs at 101.53.

UsdChf Recent high of 1.1451 is a level tested for the second time in 2 days and stands as strong initial resistance. On a more fundamental note the SCB is rumored to be planning intervention this could reassert the bullish nature of the pair – the greenback’s haven status outshining the Swissy’s for the time being. Initial support stands at 1.1414 with a strong floor in the 1.1391 area.

Resistance And Support:

EURUSD	GBPUSD	USDJPY	USDCHF
1.3459	1.5000	101.53	1.1625
1.3395	1.4963	100.77	1.1521
1.3335	1.4955	99.40	1.1451
1.3259	1.4952	98.96	1.1414
1.3207	1.4818	98.41	1.1414
1.3118	1.4777	98.09	1.1391
1.3089	1.4606	95.96	1.1355

S: Strong, M: Minor, T: Trendline, K: Keylevel, P: Pivot

Asian

Asian markets rose, China slowest growth in decade, USD rise slightly against majors

FXstreet.com (Barcelona) - Asian stocks markets have risen today after fast finish pace on Wall Street yesterday and China's GDP is seeing in a confidence view despite the lowest pace in a decade. GBP/USD has fallen below 1.5000 level, EUR/USD is trading below 1.3200, USD/JPY is testing the 98.85 support level and USD/CHF

China GDP rose 6.1% in the first quarter in 2009 from the same period last year, after 6.8% YoY last quarter 2008.

Japan's Nikkei closed up 0.14%, South Korea's Kospi Composite 0.3% higher, Taiwan index were up 2.1%, Hong Kong's Hang Seng Index was up 0.15% and S&P/ASX 200 rose 0.75%.

EUR/USD is falling 0.29%, from today's opening price at 1.3226 to the currently 1.3186. GBP/USD falls 0.13% to trade around 1.4975/85, USD/JPY has fallen 0.50% to be traded below the 98.85 level and the USDCHF is rising 0.15% above 1.1450.

DATA SNAP

DATA SNAP: UK BRC Mar Same-Store Retail Sales -1.2% On Yr

LONDON (Dow Jones)--U.K. retail sales fell again in March, despite recent signs of growing consumer confidence and housing market stabilization, indicating ahead of next week's budget that the government's value-added tax cut has failed to boost spending. 

That spells bad news for Prime Minister Gordon Brown's government, which put a 2.5-percentage-point cut in VAT at the center of its GBP20 billion November stimulus plan. 

Data Thursday from the British Retail Consortium showed March's same-store sales values fell 1.2% on the year, while total sales values - including those in new store space - were up 0.6%. In February, same-store sales fell 1.8% and total sales rose 0.1%. 

While food and clothing sales values rose on the year, most sectors saw like-for-like sales down from a year earlier, the BRC said, cautioning that the timing of Easter made year-on-year comparisons difficult. 

The March figures were slightly better than expected, as economists surveyed by Dow Jones Newswires last week had forecast total sales to decline 1.4% on the year. 

"Customers are still worried about their jobs and their own finances - so they're keeping spending under tight control," said Stephen Robertson, director general of the BRC. "We've now seen negative sales in nine of the past 10 months." 

The latest BRC report will intensify debate about the precise state of the U.K. consumer amid an increasingly severe recession. 

A series of stronger-than-expected official retail sales reports raised questions about the resilience of the U.K. consumer. But the March BRC numbers chime better with the 0.7% decline in household expenditure in the fourth quarter, the biggest quarterly drop in consumer spending since 1991. 

The U.K. economy is in recession, having contracted 0.7% in the third quarter and 1.6% in the fourth quarter, its weakest performance since 1980. In response, the Bank of England has cut its key interest rate from 5% in early October to 0.5%, the lowest level since the central bank was founded in 1694. 

The BRC also reported that in the three months to March, like-for-like sales were down 0.7% from a year earlier. Total sales in the latest quarter from a year earlier were up 1.2%. 

Helen Dickinson, head of retail at KPMG, said the survey highlighted the need to "remain cautious in drawing conclusions about the prospects for retail spending." 

   The BRC survey covered the four weeks from March 1 to April 4.       BRC Web site: http://www.brc.org.uk   

-By Joe Parkinson, Dow Jones Newswires; 44 20 7842 9291; joe.parkinson@dowjones.com 

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=ZoEQ9VJtYzxGsJmjLFOE1Q%3D%3D. You can use this link on the day this article is published and the following day. 

GLOBAL MARKETS:

GLOBAL MARKETS: European Stocks Seen Up; Global Rally Ongoing

Thu, Apr 16 2009, 06:29 GMT
http://www.djnewswires.com/eu

GLOBAL MARKETS: European Stocks Seen Up; Global Rally Ongoing

     By Andrea Tryphonides     Of DOW JONES NEWSWIRES   

LONDON (Dow Jones)--European stocks are expected to open higher Thursday after a strong finish on Wall Street Wednesday and a rally in Asia as China's GDP was seen in a favorable light, helping foster the idea a recovery may not be far away. 

Matt Buckland, dealer at CMC Markets said the Chinese GDP data "could have been worse," which will add to the European session's strength after it provided a boost to the major indexes in Asia. 

Buckland called London's FTSE 100 index up 29 points, or 0.7%, at 3997.0, Frankfurt's DAX index up 42 points, or 0.9%, at 4591.0 and the CAC-40 index in Paris 28 points, or 0.9%, higher at 3014.0. 

China's first quarter gross domestic product data were also encouraging - if not as much as some speculation had hoped. GDP grew 6.1% on the year, slightly better than the 6.0% tipped in a Dow Jones Newswires poll of economists, while first quarter urban fixed-asset investment rose 28.6% on the year, above the 26.5% forecast. 

"To me the Chinese numbers were largely expected," said Chris Weston, institutional dealer at IG Markets. "However the numbers did not fall off a cliff and generally show a bottoming process in their economy," he said. 

As a result, Asian share markets were mostly higher, with Japan's Nikkei 225 closing up 0.14% and South Korea's Kospi Composite 0.3% higher. Taiwan shares were up 2.1% and Hong Kong's Hang Seng Index was up 0.3%, climbing up from earlier lows. 

Still, "earnings news from JP Morgan stands to keep the banking sector in focus too and could well produce further volatility," Buckland warned. 

In the U.S. Wednesday, stocks surged and the Dow Jones Industrial Average closed more than 100 points higher as investors concentrated on signs of a turn in economic demand in comments from International Paper, Intel and in federal government data. 

Stocks added to gains after the Federal Reserve's regional report, or Beige Book, showed that while consumer spending remained generally weak, some districts reported that sales rose slightly or declines moderated. 

The DJIA rose 1.4% to 8029.62 and the broad Standard & Poor's 500 index rose 1.3% to 852.06. The Nasdaq Composite rose 0.1%, weighed down by Intel, which warned it expects second-quarter revenue that is flat to slightly lower than the first-quarter level. Still, Intel said the personal-computer market was likely past its worst. 

In the foreign exchanges, the dollar slipped against the yen. Analysts said that although the China GDP figure was slightly better than some forecasts, currency players had been factoring in a stronger figure and so the greenback was sold in favor of the yen, perceived as a less risky play. 

At 0620 GMT, the U.S. dollar stood at Y98.98, from Y99.46 late in New York, and the euro at Y130.64 versus Y131.56. The single currency was at $1.3205, from $1.3225. 

The positive tone in the equity markets has resulted in a move away from the perceived safe haven of sovereign debt, and at 0625 GMT the June bund contract stood at 122.67, down 0.27. 

Meanwhile, the front-month Nymex crude oil futures contract was up 49 cents at $49.74 a barrel, after slipping 16 cents in New York. Spot gold was down only $1 from New York, at $892.10 a troy ounce. 

In economic news, the euro-zone consumer price index is expected at 0900 GMT along with industrial production. In terms of individual stocks, Groupe Danone will be in focus after it reported a 2.3% fall in first-quarter revenue, held back by weaker consumer spending in dairy. And Roche Holding AG reported a 7% increase in first-quarter revenue, driven by brisk sales of its portfolio of cancer drugs. 

-By Andrea Tryphonides, Dow Jones Newswires; +44-20-7842-9281; andrea.tryphonides@dowjones.com 

Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/access/al?rnd=YMoVESPZ%2BrZ15kVS1YhILg%3D%3D. You can use this link on the day this article is published and the following day. 

USD

USD mixed across the board

 

FXstreet.com (Buenos Aires) - Dollar ends another day mixed across the board, after Gbp, Aud and Cad appreciate to multi weeks high and remain close to those levels, while Japanese Yen, Swiss Franc and specially Euro that came under pressure Wednesday with a pullback in assets associated with risk and on mounting expectations for non-standard policy measures from the ECB, lost ground. Despite the European currency remains bearish, further losses were halted by a late rally in Wall Street, that after a negative starting, managed to close the day gaining 109 points, again barely above the 8000 points level, still struggling to define a trend. Fed’s Beige book, released late in the American afternoon, show that 5 of the 12 districts noted a moderation in the pace of decline, and several signs that activity is some sectors was stabilizing at a low level. Despite that, manufacturing activity weakened across the country. Beige book also show housing markets remained depressed overall, but there were some signs that conditions may be stabilizing. 

artical

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Asia Session

 

 Risk aversion seemed to flee from the markets today in Asia as stocks followed the path forged by Wall Street earlier, but a less than stellar Chinese GDP number sent buyers to the Yen and Dollar. Early deals in Asia saw the Aussie and other high yielders such as the Kiwi Dollars gain good ground early on, with the AUD/USD hitting .7314, and AUD/JPY hitting 72.74 on murmurs that the upcoming Chinese GDP data would be better than expected. As well, NZD/USD hit 0.5935 and NZD/JPY hit 57.85 but once the GDP came out at 6.1% when most were expecting a number closer to 8% the hammer fell and traders fled to the Yen and US Dollar. From the highs, the AUD/JPY lost a full big figure and the NZD/JPY lost a little over a big figure as well.

USD/JPY made a move from 99.50 to 98.91 and the EUR/JPY fell from just under 132.00 to lows under 130.40 in a pretty swift move. The move was a routine risk adverse play even in the face of higher equities. The Dollar improved against the Euro on the data, as the EUR/USD pair fell from 1.3268 to current lows at 1.3180 as of this writing. The markets will look to tomorrow's earnings reports for a few of the big financial institutions in the US to se which path to take.....risky, or risk adverse.

Upcoming Economic Data Releases (London Session):

4/15/2009	23:01	UK	BRC March Retail Sales Monitor	15-Apr
4/16/2009	6:00	EC	EU 25 New Car Registrations	MAR	-18.00%	- -
4/16/2009	7:15	SZ	Producer & Import Prices (MoM)	MAR	-0.60%	-0.20%
4/16/2009	7:15	SZ	Producer & Import Prices (YoY)	MAR	-1.80%	-2.40%
4/16/2009	9:00	EC	Euro-Zone CPI (MoM)	MAR	0.40%	0.40%
4/16/2009	9:00	EC	Euro-Zone CPI (YoY)	MAR F	0.60%	0.60%
4/16/2009	9:00	EC	Euro-Zone CPI - Core (YoY)	MAR	1.70%	1.40%
4/16/2009	9:00	EC	Euro-Zone Ind. Prod. sa (MoM)	FEB	-3.50%	-2.50%
4/16/2009	9:00	EC	Euro-Zone Ind. Prod. wda (YoY)	FEB	-17.30%	-18.00%