USD Trading Outlook (15-05-2015)

Despite the Bank holidays in Switzerland, France and Germany, the FX markets were anything but quiet yesterday. EURUSD managed to reach a 3 month high at 1.1442, just after the US released better than expected jobless claims but not so good Producer Price Index data. Although the data was mixed, the USD found itself on the back foot, with all major currencies as well as GOLD advancing against it.

GBPUSD surged up to 1.5814, a fresh yearly high. This is the 8th daily consecutive rise against the USD without a day of correction yet. It’s a quiet day out of the UK with no economic news releases expected so trading will be mainly USD driven.

AUDUSD posted highs not seen since January (0.8163) but retreated towards 0.8040 at time of writing. Technical indicators point to a rally that has started to lose its steam. Keep an eye on GOLD prices as AUDUSD is closely correlated to the shiny metal.

It’s been a busy week overall, and action could continue in the US session as the release of key data will take place 13:15 GMT (industrial production).

On the Index front, US equities were boosted by the positive employment data which helped S&P hit a record close at 2121.1. Equities remain bullish as speculation for delaying raising interest rates is giving more confidence to stock investors. Generally low interest rate environment shifts investments into stocks, which explains the continued yearly rise in stocks ever since the FED started slashing rates towards 0%.

Trading Quote of the Day: Know the fundamentals. Trade the technicals.