Thursday June 16, 2005 - 04:08:33 GMT
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Tricom Futures and Foreign Exchange -
Forex: What's the market scared of - 1.2000 is only another number.
The USD gave back some of its gains on the back of some soft economic numbers, and the market’s wariness of breaking the 1.2000 level in the EUR/USD. Ahead of tomorrow's US Current Account Balance, the market will be wary of pushing the EUR/USD below 1.2000 In addition, there's got to be alot of option traders, and hedge fund longs wanting the EUR/USD to trade well away from 1.2000 for the time being. Ultimately, we will break below this level, the market wants to see what's hiding below. God know's the market always goes in the direction which will cause the most pain. Saying that, going into tomorrow's data i think it's worth buying EUR/USD in the low 1.2000's, looking for 100-150 points. Similarly, you can sell USD/CHF close to 1.2800 for the same profit target.
U.S. Treasury debt prices fell on Wednesday after a report on U.S. May industrial production came in above expectations, supporting the Federal Reserve's case that a soft patch in economic growth is over.
Traders were also digesting comments from Fed officials pointing to continued rate hikes, which helped the market all but ignore bond-friendly data on Wednesday showing tamer-than-expected consumer price inflation in May. The headline consumer price index fell 0.1 percent in May, below forecasts for a steady reading. The core CPI, which excludes volatile food and energy prices, rose by 0.1 percent, half the market's expectation for a rise of 0.2 percent.
Bond prices barely rose after the CPI data then quickly retreated.
U.S. stocks fell on Wednesday, pressured by a rise in oil prices to more than $56 per barrel on a larger-than-expected drop in domestic crude supplies.
Today’s Economic Releases:
· US: Weekly Jobless Claims
· US: Philli Fed Index
Today’s Top Trades
· Sell EUR/USD strength towards 1.2190-00
. Buy EUR/USD around 1.2030-40, with stops below 1.1990
. Sell USD/CHF strength towards 1.2770-80, with stops above 1.2820
. Buy AUD/NZD around 1.0760-70
For more ideas send me an email, [email protected]
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