28 May 2014
Session Recap: US Dollar advances; US Dollar does not; tipping points coming
FXStreet (San Francisco) - The US dollar posted gains versus its major rivals throughout the Asian and European sessions with the EUR/USD testing the new line-in-the-sand at 1.3610 and the USD/JPY jumping to nearly 2-week highs around 102.15; however the USD gave up gains in America and now it is as it was...
"Softer US bond yields were the main culprit," points FXBeat news service's editor Jamie Coleman. "Yields ended 4 bp below their intraday highs despite strong durable goods, home prices and service sector data."
In this framework, US stocks returned from the long weekend with solid gains as the Nasdaq rallied, the S&P closed at record highs while the Dow finished 40 points shy of its highs. On the other hand, the gold plunged around $30 to lows since February 7th at $1264/oz as traders were ditching gold as safe-haven.
On currencies, the EUR/USD posted its fifth negative day in the last six, but the pair was unable to break below the 1.3610 again. EUR/USD is dealing with the 200-day MA level, a respected MA line since July 2013 when the EUR/USD broke to the upside around 1.3040. Key level indeed.
As for the short term, "the hourly chart shows indicators correcting higher from oversold levels, but price still below a bearish 20 SMA which keeps bears in the drivers’ seat," comments FXStreet's chief analyst Valeria Bednarik. "In the 4 hours chart the technical picture is also mild bearish, with 20 SMA above current price and indicators below their midlines, albeit lacking strength."
"Daily candle is about to confirm a doji, reflecting the uncertainty surrounding the pair right now," Bednarik concludes.
The USD/JPY closed its fourth single day advance in the latest five session with the pair reaching highs since May 14 at 102.15. Market is focused on the '61.8 Fibo level around 102.00' as Coleman pointed out in his today's interview with Dale Pinkert in the Live Analysis Room. Coleman affirmed that a US 10-year yield above 2.58% is needed to be convinced of more USD/JPY upsides.
In a wider picture, the USD/JPY is extending its recovery from the 200-day test at 100.75 of May 21st. The pair is trading sideways in between 100.75 and 104.00 in a similar pattern performed in August 2012 around 77.60/76.60 just before breaking up the 200-day MA, last time this MA was broken in any direction.
Main headlines in the American session
US: Durable Good Orders (Apr) rose 0.8%
US March Case-Shiller house price index +12.37% y/y
United States Housing Price Index (MoM) registered at 0.7% above expectations (0.5%) in March
United States Markit Services PMI above forecasts (55.6) in May: Actual (58.4)
May Richmond Fed +7 vs +5 expected
United States Consumer Confidence in line with forecasts (83) in May
Dallas Fed manufacturing +8.0 vs +9.2 expected
Wall Street returns with gains amid economic data
"Softer US bond yields were the main culprit," points FXBeat news service's editor Jamie Coleman. "Yields ended 4 bp below their intraday highs despite strong durable goods, home prices and service sector data."
In this framework, US stocks returned from the long weekend with solid gains as the Nasdaq rallied, the S&P closed at record highs while the Dow finished 40 points shy of its highs. On the other hand, the gold plunged around $30 to lows since February 7th at $1264/oz as traders were ditching gold as safe-haven.
On currencies, the EUR/USD posted its fifth negative day in the last six, but the pair was unable to break below the 1.3610 again. EUR/USD is dealing with the 200-day MA level, a respected MA line since July 2013 when the EUR/USD broke to the upside around 1.3040. Key level indeed.
As for the short term, "the hourly chart shows indicators correcting higher from oversold levels, but price still below a bearish 20 SMA which keeps bears in the drivers’ seat," comments FXStreet's chief analyst Valeria Bednarik. "In the 4 hours chart the technical picture is also mild bearish, with 20 SMA above current price and indicators below their midlines, albeit lacking strength."
"Daily candle is about to confirm a doji, reflecting the uncertainty surrounding the pair right now," Bednarik concludes.
The USD/JPY closed its fourth single day advance in the latest five session with the pair reaching highs since May 14 at 102.15. Market is focused on the '61.8 Fibo level around 102.00' as Coleman pointed out in his today's interview with Dale Pinkert in the Live Analysis Room. Coleman affirmed that a US 10-year yield above 2.58% is needed to be convinced of more USD/JPY upsides.
In a wider picture, the USD/JPY is extending its recovery from the 200-day test at 100.75 of May 21st. The pair is trading sideways in between 100.75 and 104.00 in a similar pattern performed in August 2012 around 77.60/76.60 just before breaking up the 200-day MA, last time this MA was broken in any direction.
Main headlines in the American session
US: Durable Good Orders (Apr) rose 0.8%
US March Case-Shiller house price index +12.37% y/y
United States Housing Price Index (MoM) registered at 0.7% above expectations (0.5%) in March
United States Markit Services PMI above forecasts (55.6) in May: Actual (58.4)
May Richmond Fed +7 vs +5 expected
United States Consumer Confidence in line with forecasts (83) in May
Dallas Fed manufacturing +8.0 vs +9.2 expected
Wall Street returns with gains amid economic data