Forex trading headlines for 21 may 2014
- April FOMC minutes: Too early to confirm if economy moving to sustained above trend growth
- US MBA mortgage index w/w 366.50 vs 363.40 prev
- US 2014 GDP lowered to 2.5% – Reuters poll
- ECB main rate cut and negative deposit rate is coming – Reuters poll II
- Jump for joy as Europe finally signs something on the bank fund
- May eurozone consumer confidence flash -7.10 vs -8.20 exp
- No decision on ECB action in June has been taken says Weidmann
- Why US banks are often in crisis and Canadian banks never fail
- EIA crude stocks off 7.2m barrels vs 0.75m build exp
- EU getting nervous after Russia reaches gas deal with China
- Merkel: Euro area faces huge task in lowering unemployment
- US VP Biden says he will discuss energy security in Cyprus
- Russia to fight back over last round of US sanctions
- FOMC minutes having a go at playing good cop bad cop
From the US Fed soap box
- Fed’s Dudley says opportunities shrinking for middle-skill workers
- Fed should keep reinvesting proceeds form maturing MBS’s says Dudley
- Fed struggled to solve financial crisis
- Stanley Fischer confirmed onto Fed board
- Fed’s Kocherlakota says that Fed should consider price level targeting
- Kocherlakota: Monetary policy has distributional consequences
- Kocherlakota doesn’t know an awful lot
- Fed’s George says having rates low so long will have consequences
Best to raise rates before ending bond reinvestment says Fed’s Williams
Yen selling was the theme that greeted me when I pulled up at my desk. USD/JPY was recovering from the BOJ after party and a test of the much touted level at 100.75. With Yellen and the FOMC minutes on the docket we pushed through 101 to 101.50 where we trod water until the minutes were released. Ten pips either way we went on the details, from a Fed who’s standing on the prow of the boat looking forward after deciding that they need not bail any more water out of a once sinking economy. 101.60 was the big level up top and it held out. We finish the session at 101.41
The yen crosses were trying to follow suit in rallying and while GBP/JPY was happy to party, rising from the European lows at 169.81 to 171.49, EUR/JPY was was having a crisis of loyalties as EUR/USD went looking for the downside. It finally managed to pick a side and ran to the session highs at 138.78 before EUR/USD fell and dragged it with. A late round of dollar selling saw it gain back the highs to finish at 137.77
EUR/USD was looking fed up after another failure at 1.3730. This time the pushers gave up and we sank to 1.3670. Not long after another push towards 1.3650 was thwarted 2 pips short but a late, pre-FOMC stop run saw us hit 1.3635 before instantly returning to 1.3650/60. As some of the dollar positivity ran out after the FOMC we took out resistance at 1.3670 but showed no interest in 1.3700. 1.3686 is where we hand over.
GBP/USD largely ignored what was going on around it but did manage to give up around 65 pips from the retail sales highs as dollar buying finally became too much to resist. It didn’t last long and we’re currently knocking around 1.6900.
AUD/USD found the barrier and buy interest too much at 0.9200 and stayed 9 pips from the big figure. The bounce isn’t much to right home about and the 30 pips it has leaves it short of the days highs.
US Oil looked like it had priced in the EIA report and managed to break into 104 to 104.29 and looks very bid. We gave some up to 103.78 but there’s plenty of room to roam on the chart before we hit any meaningful resistance.
Gold touched the April support line at 1283 over the FOMC but soon found its way back into the the 1290 range.
All being well Sean should be along shortly and we’re back to normal tomorrow.
I hope you’ve managed to bank a few good trades today and I’ll see you all in time for the UK data tomorrow.
