USD Trading Outlook (04-02-2014)

Currencies

• The euro (EUR) swings between losses and gains but looks that is moving higher against the greenback. The single currency gained after better Manufacturing PMI data revealed from Eurozone and is now trading around 1.3530 against the US dollar.
• The US dollar (USD) continues to slide for another day reaching its three month low at 100.74 against the Japanese yen (JPY). The yen appreciated on speculation that the US economic growth is slow and ahead of the US payrolls due at the end of the week.

Equities

• The European equities fell as investors are moving away from equities. TheUK 100 (FTS) slid down to 6342 touching its lowest level since October 2013 and the GER 30 (DAX) dropped down to 9085.

Commodities

• WTI crude (OIL) rebounded up to 97.93 before dropping down to 96.25 US dollars per barrel. Crude oil declined on speculation that the US economy does not recover as expected and this will have an impact on the crude oil price as the US stockpiles might rise in the short term.

Mover & Shaker with forex options

• The British Pound (GBP) continues its decline by reaching a six week low at 1.6255 against the US dollar (USD). The UK manufacturing PMI came out worse than expected yesterday and on the schedule today is the UK Construction PMI due at 09:30 GMT.
• The cable remains under pressure and options traders may consider constructing a Bear Put Spread on GBPUSD and capture any possible potential from this downside rally.
• A Bear Put Spread can be constructed by purchasing an at-the-money Put and selling an out-of-the-money Put.