USD: The Dollar has been able to shake off negative pressure this morning, and has put together a sizable rebound from last night’s lows. While yesterday’s decent Retail Sales reading was clearly a benefit, safe-haven support has been diminished as overseas risk concerns have been fairly subdued early this week. In addition, a short-covering rebound in the Yen has been a source of near-term headwinds for the Dollar this morning. Comments from Fed President Plosser gave further credence to the QE tapering ideas heard over the weekend, but actual Fed action may be too far on the market’s horizon to provide the Dollar with any near-term benefit. With no “top-tier” US economic data this morning to fuel additional improvement in sentiment, the Dollar is likely to remain subdued through the balance of today’s trading session. The Dollar may head up towards the 83.52 level later this morning, but will continue to look towards overseas risk concerns for additional support in order to sustain today’s upside momentum.
EUR: The June Euro went through a bumpy overnight trading session, and clearly found difficulty holding above the 130.00 level earlier this morning. A better than expected reading for Euro zone Industrial Production was able to partially offset the negative impact of a lackluster German ZEW survey, as well as lukewarm readings for German inflation. Healthy demand at this morning’s Spanish short-term debt auction is likely to be a critical factor providing underlying support for the Euro during today’s session. While peripheral EU debt anxiety has not been fully subdued just yet, news headlines from the region’s trouble-spots have been quiet enough for the Euro to be able to resume this week’s recovery if and when global market risk sentiment turns around. The June Euro will have a near-term downside target of 129.48, but should retain enough support to avoid any sharp downside move during the course of today’s trading session.
GBP: The June Pound has come back under pressure early this morning, and has now fallen to a fresh new low for the move. While the Bank of England appears to be well away from starting up fresh easing measures, the prospects for a negatively received Quarterly Inflation Report tomorrow morning are likely to keep the Pound on the defensive during today’s trading. The June Pound should find near-term support around the 152.58 level later this morning, and is likely to find additional pressure in front of tomorrow’s report.
JPY: The June Yen has seen some volatile price action during the past few hours, but for the moment remains in positive territory coming into this morning’s session. A better-than-expected reading on Japanese Corporate Goods Prices may be due in no small part to the benefit of a weaker Yen for that nation’s export-related firms, but this positive datapoint has helped to fuel a short-covering rebound. The inability for the Yen to sustain any sort of rally may indicate how fragile any near-term recovery will be, even if the tone of upcoming US data turns negative. There may be an opportunity for the Yen to briefly climb back above the 99.00 level, at which point traders should consider approaching the short side of the market again using long put option strategies. The June Yen may bounce back towards the 98.68 level later today, but is showing signs of being top-heavy after failing to followthrough to the upside.
CHF: The June Swiss was able to briefly rise above the 105.00 level this morning, but along with the Euro is having trouble sustaining upside momentum. Look for the Swiss Franc to continue holding the upper hand on the Euro early this week, but lukewarm global risk sentiment is likely to keep a full-scale recovery rally under wraps for now. The June Swiss may climb back above the 104.72 area again later today, but will still have a long way to go in order to fully recover from recent chart damage.
CAD: The June Canadian could not sustain a modest overnight rally and has fallen back into negative territory this morning, although prices have held inside of yesterday’s trading range. With little in the way of Canadian economic data until tomorrow, the Canadian Dollar needs to find a stronger tone from outside markets in order to shake off today’s early pressure. The June Canadian should find near-term support around the 98.54 area, and should remain fairly well supported in spite of today’s lukewarm global market risk sentiment.