Forex Technical & Market Analysis: May 29 2013
2013-05-29 02:40 GMT
EUR Succumbs to Rise in U.S. Yields
Demand for U.S. dollars kept pressure on the euro and all major currencies throughout the North American session. Between the recovery in U.S. stocks and the surge in U.S. yields, the dollar is one of the most coveted currencies. Even though we haven’t seen a major pickup in foreign demand for U.S. dollars, particularly from Japan, the longer U.S. yields hold above 2% (10 year yields are at 2.15%), the more tempting it will be for foreign investors. The lack of U.S. data at the front of the week means the lack of threat to the dollar rally. As long as the good news continues to flow in, the dollar will remain in demand. How well the greenback performs against various currencies will of course depend on how economic data from those countries fare. We have seen some recent improvements in Eurozone data that reduces the chance of additional easing by the European Central Bank. German labor market numbers are scheduled for release tomorrow and an upside surprise will keep the EUR above 1.28.
The main driver of EUR/USD weakness has been the divergence between U.S. and Eurozone data – one was improving as the other was deteriorating. If we start to see improvements in the Eurozone economy, then the dynamics affecting the euro will start to change to benefit of the currency. Unfortunately based on the latest PMI numbers, there’s a risk of a downside surprise. According to the report, staffing levels fell for the first time since January with job shedding seen in both the manufacturing and service sectors. If unemployment rolls climb in the month of May, the EUR/USD could extend its losses but even then, the losses could be contained to 1.28, a level that has held for the past month. We probably need to see back to back weakness in Eurozone data (German unemployment and retail sales) for 1.28 to be broken.-FXstreet.com
FOREX ECONOMIC CALENDAR
2013-05-29 07:55 GMT
Germany. Unemployment Change (May)
2013-05-29 12:00 GMT
Germany. Consumer Price Index (YoY) (May)
2013-05-29 14:00 GMT
Canada. BoC Interest Rate Decision
2013-05-29 23:50 GMT
Japan. Foreign bond investment
FOREX NEWS
2013-05-29 04:41 GMT
Sterling hovering above critical support at 1.5000
2013-05-29 04:41 GMT
USD unchanged; IMF lowers China GDP forecast
2013-05-29 04:16 GMT
EUR/USD technical picture continues to sour, more declines to come?
2013-05-29 03:37 GMT
AUD/JPY continues to find firm bids near 97.00
MARKET ANALYSIS – Intraday Analysis
Upwards scenario: Our medium-term outlook is shifted to the negative side after the losses provided yesterday, however market appreciation is possible above the next resistance at 1.2880 (R1). Loss here would suggest next intraday targets at 1.2899 (R2) and 1.2917 (R3). Downwards scenario: Fresh low at 1.2840 (S1) offers a key resistive measure on the downside. Break here is required to enable bearish pressure and validate next target at 1.2822 (S2). Final support for today locates at 1.2803 (S3).
Resistance Levels: 1.2880, 1.2899, 1.2917
Support Levels: 1.2840, 1.2822, 1.2803
Upwards scenario: Our attention on the upside is put to the next resistive barrier at 1.5052 (R1). Break here is required to stimulate bullish forces to expose initial targets at 1.5078 (R2) and 1.5104 (R3) later on today. Downwards scenario: On the other hand, break below the support at 1.5014 (S1) is required to enable further market decline. Our next supportive measures locates at 1.4990 (S2) and 1.4967 (S3).
Resistance Levels: 1.5052, 1.5078, 1.5104
Support Levels: 1.5014, 1.4990, 1.4967
Upwards scenario: Instrument gained momentum on the upside recently, turning short-term bias to the positive side. Further upwards penetration above the resistance at 102.53 (R1) would enable bullish forces and might drive market price towards to our initial targets at 102.70 (R2) and 102.89 (R3). Downwards scenario: On the other hand, prolonged movement below the initial support level at 102.01 (S1) might trigger protective orders execution and drive market price towards to supportive means at 101.82 (S2) and 101.61 (S3).
Resistance Levels: 102.53, 102.70, 102.89
Support Levels: 102.01, 101.82, 101.61
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