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16 May 2014
Session Recap: Good/Bad news support the EUR/USD at 1.3650
FXStreet (San Francisco) - The day that the US inflation returned to the Fed's target of 2.0% YoY for first time since July 2013 and 10-year yields break below the 2.50% psychology level for the first time since October 2013, the EUR/USD couldn't break down the 1.3650 area.
Choppy session in the American morning that was followed for a quiet trade in the afternoon as investors was surprised by weak data in Europe but positive numbers in the United States; however the risk aversion took the market as European peripheral bond markets showed problems and investors ran to safe havens.
Adam Button pointed that “the market is wondering what horrors bond traders are seeing." Beside the melt-down in European bonds, US 10-year bonds declined to 2.47%. There are talks about negative growth in US in the Q1 plus another set of rumors of a short squeeze; however, Quartz editor Matt Phillips also said in his Twitter account following US data: "Wow. US jobless claims hit post crisis low of 297K. Underestimate the momentum of the US economy at your own risk..."
The Dow and the S&P performed its biggest single day decline since April 10 while the Nasdaq closed down for third day and the Russell 2000 is officially in a corrective movement after declining 10% from highs.
On the currency market, the EUR/USD completed a 60-pip roundtrip by falling to 1.3650 from 1.3720 and then jumping to 1.3730 to finally post a barely decline of 10 pips at 1.3705. The pair remains now above 1.3700.
Nevertheless, it's 'still not enough' according to FXStreet chief analyst Valeria Bednarik. "Technically, the EUR/USD hourly chart shows indicators posted a nice came back from extreme oversold levels halting around their midlines and losing early upward momentum, while price stands above a flat 20 SMA but failed to overcome 1.3730 highs."
"This latest recovery seems mostly corrective, moreover as price held below 1.3745 immediate and critical resistance level to break to extend current short term rally," Bednarik concluded.
The GBP/USD posted its second positive day in the last seven after bouncing at 1.6730 to test the 1.6800 level and then, to trade in consolidation mode around 1.6790. The USD/JPY collapsed from 102.10 to test April 10th lows at 101.30 as the pair joined its correlation with US 10-year yields. Pair managed to recover from this level and then it closed at 101.55.
Major headlines in the American session
May US Empire state manufacturing index 19.01 vs 5.00 exp
April US CPI 2.0% vs 2.0% exp y/y
US initial jobless claims 297k vs 320k exp
US yields dropping like a stone
Phily Fed 15.4 in May; consensus 14
Wall Street closes 2-day selloff
Choppy session in the American morning that was followed for a quiet trade in the afternoon as investors was surprised by weak data in Europe but positive numbers in the United States; however the risk aversion took the market as European peripheral bond markets showed problems and investors ran to safe havens.
Adam Button pointed that “the market is wondering what horrors bond traders are seeing." Beside the melt-down in European bonds, US 10-year bonds declined to 2.47%. There are talks about negative growth in US in the Q1 plus another set of rumors of a short squeeze; however, Quartz editor Matt Phillips also said in his Twitter account following US data: "Wow. US jobless claims hit post crisis low of 297K. Underestimate the momentum of the US economy at your own risk..."
The Dow and the S&P performed its biggest single day decline since April 10 while the Nasdaq closed down for third day and the Russell 2000 is officially in a corrective movement after declining 10% from highs.
On the currency market, the EUR/USD completed a 60-pip roundtrip by falling to 1.3650 from 1.3720 and then jumping to 1.3730 to finally post a barely decline of 10 pips at 1.3705. The pair remains now above 1.3700.
Nevertheless, it's 'still not enough' according to FXStreet chief analyst Valeria Bednarik. "Technically, the EUR/USD hourly chart shows indicators posted a nice came back from extreme oversold levels halting around their midlines and losing early upward momentum, while price stands above a flat 20 SMA but failed to overcome 1.3730 highs."
"This latest recovery seems mostly corrective, moreover as price held below 1.3745 immediate and critical resistance level to break to extend current short term rally," Bednarik concluded.
The GBP/USD posted its second positive day in the last seven after bouncing at 1.6730 to test the 1.6800 level and then, to trade in consolidation mode around 1.6790. The USD/JPY collapsed from 102.10 to test April 10th lows at 101.30 as the pair joined its correlation with US 10-year yields. Pair managed to recover from this level and then it closed at 101.55.
Major headlines in the American session
May US Empire state manufacturing index 19.01 vs 5.00 exp
April US CPI 2.0% vs 2.0% exp y/y
US initial jobless claims 297k vs 320k exp
US yields dropping like a stone
Phily Fed 15.4 in May; consensus 14
Wall Street closes 2-day selloff