USD: The Dollar has been able to shake off overnight pressure and post modest gains this US morning, although upside momentum has been limited at best as prices have been weighed down by the lukewarm tone of recent US economic data. Weak data from Europe has been the main source of strength for the Dollar this morning, but a lack of fresh risk concerns from that region is helping to keep further gains in check. Today’s Chicago PMI and Consumer Confidence reading wills play a major role in whether the Dollar can build upon these early gains. With the Dollar’s safe-haven support likely to be a back-burner issue this morning, a positive tone from the US economy is clearly needed for the market to lift clear from these recent lows. The Dollar may grind out a further rally to the 82.41 level later today, but is likely to remain well below last week’s highs unless overseas risk concerns become a front-and-center issue with the market once again.
EUR: The June Euro has seen some choppy and two-sided trading during the past couple of hours, as the recent recovery rally appears to have run out of steam. While lower than expected Italian Unemployment provided a brief upsurge, a series of weak readings on Euro zone Unemployment, Euro zone Inflation and German Retail Sales are clearly weighing on prices this morning. Rising expectations that the ECB will finally cut rates at Thursday’s meeting are also providing headwinds for the Euro this week, but a lack of fresh risk headlines from peripheral EU trouble spots has kept today’s pullback from gaining further momentum. Without the benefit of stronger risk appetites throughout global markets, the Euro is likely to remain on the defensive through the US economic report window. The June Euro should find decent support around the 130.55 level during today’s session, but will clearly need to see better EU economic data to regain upside momentum.
GBP: The June Pound was able to make a notable recovery from overnight losses, and remains in close proximity to yesterday’s new 2-month high. While there have been enough positive readings from recent UK economic data to push any potential Bank of England easing measures well into the future, this morning’s surprise drop in a private reading of UK consumer confidence indicates that additional strong UK data points will be needed to sustain this rally. The June Pound could slide back towards the 154.76 level later in today’s session, and will likely need to see stronger global risk attitudes in order to re-challenge yesterday’s highs.
JPY: The June Yen has been the major beneficiary of this morning’s sluggish Euro zone data, as prices have been grinding higher after a bumpy Asian session. Last night’s large series of Japanese economic numbers produced mixed results, although a jump in the Japan PMI reading and a decline in their Unemployment rate have helped to overcome weak Retail Sales and Industrial Production data. Last week’s sluggish Japanese CPI data still casts a long shadow over the market, even with the 2% inflation target pushed back towards 2016. It may take getting beyond this week’s Fed and ECB meetings to sustain any improvement in global risk attitudes, which will allow the Yen to hold onto this morning’s recovery rally. The June Yen may take this rebound up to the 102.86 area later today, which will provide a fresh opportunity to approach the short side of the market using long put option strategies.
CHF: The June Swiss may be having trouble holding onto overnight gains this morning, but should continue to regain lost ground versus the Euro as this morning’s weak Euro zone economic readings will create a sharp contrast with the comparative stronger Swiss economy. There has been little in the way of carryover support from lukewarm global risk appetites, which will make it difficult for the Swiss Franc to take this current recovery rally up into new high ground. The June Swiss is likely to fall back towards the 106.65 area later on in today’s session, and will be looking for help from outside markets in order to consolidate near the top end of this recent rally.
CAD: The June Canadian remains well supported after the sharp rally of the past 3 sessions, but is having trouble taking prices up into new high ground this morning. Today’s Canadian GDP and PPI numbers will a big test for this recent up move, as strong readings from both sets of data could send the market up to a new 2-month high fairly quickly. The June Canadian will head up towards the 98.90 level early in today’s trading, then should gain added upside momentum from a positive reception for today’s Canadian economic data.
EasyForexNews Research Team