Wednesday June 29, 2005 - 04:58:13 GMT
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Tricom Futures and Foreign Exchange -
Forex: The USD's Up, the Dow's Up, and US GDP's Up. Who says the US is in trouble?
The overnight price action suggests we were either a day late (after going short EUR on Monday), or a day early (ahead of the FOMC). Anyway, the market now appears resigned to the fact that we are heading below 1.2000 in EUR/USD, and well above 110.00 in USD/JPY. On the close of NY this morning we saw $JPY break above 110, and trade upto 110.10 on stops, but then quickly retreated to back under 110, before breaking above 110 again during the Tokyo fix. The 110.20-25 area will be initial resistance, while 109.90-110.00 will offer support for those looking to get long.
The USD gained across the board on Tuesday as oil prices retreated, although fears persisted in the market that high crude costs will depress the yen as Japan's economy relies heavily on imported energy.
U.S. crude oil prices, a key driver in the currency markets, ended lower on Tuesday just above $58 per barrel on profit-taking, after hitting an all-time high of more than $60 this week. Still, oil has risen nearly 30 percent in just over a month on concerns about global strains on production and refining capacity.
U.S. Treasury debt prices tumbled on Tuesday after a report showed U.S. consumers in June were the most optimistic in three years and crude oil prices fell sharply from record highs.
The Conference Board's report suggested that Americans were unfazed by a renewed climb in gasoline prices and in a mood to keep priming the pump of retail spending.
Meanwhile, a slump in crude oil futures back below $60 a barrel hurt Treasury prices by alleviating fears of a de facto "consumption tax" on consumer spending.
Treasuries have been a safe haven for investors over the past few days. But the consumer confidence surprise and oil decline encouraged traders to put money back into equities.
Major U.S. stock indices rose about 1 percent.
U.S. stocks rose on Tuesday, as crude oil's fall to around $58 a barrel and a jump in a gauge of consumer confidence to a three-year high relieved investors' concerns about a slowdown in profit growth and consumer spending.
Today’s Economic Releases:
US: GDP Final Q1
Today’s Top Trades
· Sell EUR/USD strength towards 1.2080-.2100
. Sell GBP/USD around 1.8210-20
. Buy USD/CHF around 1.2770-80
For more ideas send me an email, [email protected]
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