- Euro weighed down by Greece and Merkel comments. EUR/USD plays 1.1267/1.1151.
- EUR/GBP hits 0.7197, EUR/CHF 1.0442 lows.
- Dollar index up to 95.678, recovering from Wednesday’s near one-month low of 94.322.
- NOK gains 1.6% vs EUR after Norway oil/gas investment outlook.
- Norway oil/gas investment seen up 1.4% in 2016.
- Merkel- Too strong euro makes reforms harder in Spain, Ireland.
- German Govt spokesman– Germany working to keep Greece in the euro zone.
- German fin ministry Spokesman- Not the case that the IMF has broken off talks with Greece.
- Euro group chief- Talks await ‘serious proposals’ from Greece.
- BOE Mccafferty- Time of extraordinary policy stance gradually drawing to a close.
- Euro Zone April Industrial production 0.1% m/m, 0.8% y/y vs previous -0.4%/2.1% revised. 0.3%/1.1% expected.
- UK April Construction output volume -0.8% m/m, 1.5% y/y vs previous 1.4%/5.0% revised. -0.5%/0.5% expected.
- Swiss KOF institute expects brief recession in Switzerland that will be over in 2H of 2015.
- (0830 ET/1230 GMT) US PPI Final Demand (May) consensus +0.4% m/m; previous -0.4% m/m, -1.3% y/y.
- (0830 ET/1230 GMT) US PPI Final Demand ex-food/energy (May) consensus +0.1% m/m; previous -0.2% m/m, +0.8% y/y.
- (1000 ET/1400 GMT) US UOM Consumer Sentiment Index (Jun) consensus 92.0, previous 90.7.
- (1000 ET/1400 GMT) US UOM Current Conditions Index (Jun) previous 100.8.
- (1000 ET/1400 GMT) US UOM Expectations Index (Jun) previous 84.2.
Key Events Ahead
- No significant Treasury or Fed events scheduled.
FX Recap
EUR/USD is supported below 1.1200 levels and currently trading at 1.1192 levels. It has made intraday high at 1.1266 and low at 1.1150 levels. The euro fell 0.2 percent to $1.1240 in early European trade after the IMF pulled out of debt talks with Greece while the dollar clung to modest gains on Friday. Again the pair fell sharply after the German Chancellor Angela Merkel expressed concerns over the strength in the Euro. Merkel said that too much strength in the Euro would limit the effectiveness of reforms in Spain and Ireland. Merkel’s comments pushed the spot below 1.1228, where fresh offers ensured the pair fell well below 1.12 levels. Today German WPI released with positive number to 0.5%, previous 0.4% and Euro Zone industrial production data came with negative marks at 0.1%, market expectation at 0.4%. Initial support is seen around 1.1144 and resistance is seen around 1.1296 levels. Option expiry is at 1.1225-30 (530M).USD/JPY is supported above 123.00 levels and posted a high of 123.80 levels. It has made intraday low at 123.32 and currently trading at 123.67 levels. Industrial production in Japan rose more-than-expected, data showed today. In a report, the Ministry of Economy, Trade and Industry said that industrial production rose to a seasonally adjusted 1.2%, from 1.0% in the preceding month. Better performance from US Treasuries keeps bolstering the upside momentum in the pair. Near term resistance is seen at 124.57 and support is seen at 123.02 levels. Option expiries are at 123.00 (2.3BLN), 125.00 (1.18BLN).GBP/USD is supported around $1.5500 levels. It made an intraday high at 1.5525 and low at 1.5465 levels. Pair is currently trading at 1.5501 levels. Pair fell to a session low of 1.5265 after German Chancellor Angela Merkel’s concerns regarding strong Euro triggered a broad based rally in the US dollar. Today UK released construction output data with negative numbers to -0.8%, previous at 1.4%. Initial support is seen at 1.5440 and resistance is seen around 1.5535 levels.USD/CHF is supported above 0.9300 levels and trading at 0.9343 levels and made intraday low at 0.9322 and high at 0.9389 levels. Today was data free session for Switzerland; market will eye on US PPI and core PPI data release due later in a day. Near term support is seen at 0.9242 levels and resistance is seen at 0.9372 levels. Option expiry is at 0.9350 (420M).AUD/USD is supported just above 0.7700 levels and trading at 0.7710 levels. It has made intraday high at 0.7757 levels and low at 0.7677 levels. Pair has come under some mild selling pressure in early Tokyo. There was no major economic news scheduled for the day from Australia, market will eye on USD data release due later in a day. Initial support is seen at 0.7568 and resistance at 0.7811 levels. Option expiries are at 0.7550 (304M), 0.7925 (401M).NZDUSD is supported below 0.7000 levels and currently trading at 0.6975. It has made intraday high at 0.7026 and low at 0.6952 levels. On Thursday, the kiwi slumped to fresh five year lows at 0.6965 after the central bank’s decision to cut the Official Cash Rate (OCR) to 3.25% was announced. The NZD/USD pair remains pressured as the RBNZ also hinted that further rate cut was on table. Moreover, broad based US dollar strength following better than expected US retail sales and in line with expectations weekly jobless claims kept the Kiwi undermined. Later today, US PPI and consumer sentiment data will provide fresh cues on the US dollar moves, having major impact on the NZD/USD pair. Initial support is seen at 0.6946 and resistance is seen around 0.7055 levels. Option expiries are at 0.6900 (628M), 0.7200 (738M).
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