Daily Outlook – Friday 16th June
What Happened on Thursday > Top 3?
>USDJPY take off higher towards 111
>US Data holds firm, helping USD trade firm against all majors
>Aussie employment data very solid but USD reigns supreme
Outlook / Fast Summary
+Bank Of Japan this afternoon- USDJPY 110.90
+Euro Final yearly CPI data & US Building data tonight.
+Bank Of England stood pat GBPUSD holding 1.2750
Data & Event Risk? :
- (JPY) Bank Of Japan Monetary Policy – Tentatively >12noon Tokyo (1pm Sydney)
- (EUR) Final Yearly CPI – 7pm Sydney
- (USD) US Building Permits – 30pm Sydney
USDX: 97.20
USD Index traded in tight range between 96.90 & 97.35.
USDX traded higher towards 97.35 before a quiet retreat. A good sign of a slow day to come before the Bank of Japan.
USDJPY: 110.95
Dollar-Yen took off higher yesterday from steady levels around 109.40 to jet up to take on the 111 handle as we speak.
111 looks certain in early Asian FX dealing, even though not too many surprises are expected today from the Bank Of Japan (BOJ).
We are in the middle of a familiar trading range of 110 – 113 once again.
EURUSD: 1.1145
The Euro was Offered most of the Asian & London trading sessions yesterday, hitting lows around 1.1130 in US trade before a tiny bounce.
After it’s flirt with the 1.1300 level very briefly on the soft US CPI on Wednesday night, it has fallen hard since.
This move seems totally driven by USD buoyancy but I can see a small recovery likely to end the week with profit taking, pushing EURUSD near 1.1200 once again.
GBPUSD: 1.2765
Sterling had an interesting trading day over the monetary policy announcement for the UK.
Bank Of England (BOE) stood pat, unchanged and I note that they voted (3) to increase, (0) to decrease & (5) to Hold rates.
The Cable traded in a tight trading range limited on the upside with resistance holding firm at the 1.2800 level.
We are only Bid 15 pips above this time yesterday so I expect a quiet day of consolidation for GBPUSD.
AUDUSD: 0.7587
The Aussie saw a tick up yesterday on the back of a stellar jobs report, but it didn’t last.
I loved seeing the local Unemployment rate dip lower, but I feel that traders are doubting the new jobs added number somewhat.
In fact, the Aussie turned lower in the London session and dribbled around the 7580 level to kick off the new trading day.
Next Tuesday we get the RBA’s meeting minutes from last fortnight’s meeting, so I expect that may drag the Aussie back to Earth a little.
I am still short this pair looking for USD selloffs to reverse, so any strong data points for USD will jolt AUDUSD back into the 7500’s.
NZDUSD: 0.7210
The kiwi back into the 7200 handle yesterday and seems happy holding the 7200 level for now.
I would not be surprised if a small correction kicks the NZDUSD back into 7180 / 7200 holding pattern at some point next week with a somewhat quiet US data calendar coming.
USDCAD: 1.3240
USDCAD was a beautiful scalp trade higher yesterday, as it took off from 1.3245 to nail the 1.3300 handle before a turn back.
I would expect the downtrend to come back into play today and USDCAD take on the 1.3200 level again.
Watching Oil drift around 44.50/45.00 very closely for correlations in this pair…
VIX:10.90
Volatility Index up slightly on the day yesterday but still very low sub 11.
The US data points in the coming weeks will be the catalyst for a higher VIX and bigger breakout trading ranges, but in the meantime markets are digesting the Feds commentary from this morning as the Treasury markets are mostly unchanged.
GOLD: $1,253.40
Gold had a soft trading day Thursday with a continued slide back towards 1253.
Markets are still Bid on the USD causing Gold to slide back to the familiar 1250 level.
I would expect today to be a day of consolidation to close off the week.
Oil (WTI) : $44.64
Oil saw a soft slide yesterday to lows around 44.30 and hasn’t moved a great deal since.
The $45 area will likely hold in the short term until we see more headlines regarding production levels.
Macro Themes in Play
Volatility still Low
- USD & rates extend post-FOMC rebound, helped by decent June data overnight for US Jobless claims & the Philly Fed Manufacturing Index number.
