July 1st Economic Calendar
Australian Retail Sales
The seasonally adjusted Aussie Retail Sales figures for May, expected to be up 0.5%, came in better than expected at +1.0%, better than the April release of 0.3%. Also, released earlier was the DEWR Skilled Vacancies reading month over month for June at -3.7%, better than the prior month’s reading (-7.0%.)
Fed’s Yellen Speaks
- Economy may be ‘poised to turn the corner.’
- Sees risk inflation as being too low for ‘several years.’
- ‘Downward pressure’ on wages, prices may intensify.
- Financial markets are ‘in much better shape.’
- Mortgage rates may ‘place drag’ on housing.
- Sees recession ending ‘sometime later’ in 2009.
- Recovery will be ‘frustratingly slow.’
- ‘Credit will remain tight for sometime to come.’
- Unemployment to be ‘painfully high for several years.’
- Risk of ’severe shakeout’ in commercial real estate.
- Risk the Fed will tighten policy too soon.
- No real threat of inflation surge.
- SDR replacement of the USD is not practical at this time.
These comments gave the USD a bid across the board, hitting Sterling the hardest and fastest, off over half a cent instantly.
Japan’s Tankan Manufacturing Readings
The following are the 2nd quarter Tankan Manufacturing readings:
Tankan Large Manufacturers Index – Survey:-43 Actual:-48 Prior:-58
Tankan Large Manufacturing Outlook – Survey:-34 Actual:-30 Prior:-51
Tankan Non-Manufacturing – Survey:-27 Actual:-29 Prior:-31
Tankan Non Mfg Outlook – Survey:-23 Actual:-21 Prior:-30
Tankan Large All Industry Capex – Survey:-6.9% Actual:-9.4% Prior:-6.6%
This mixed bag of worse indicators and better outlook moved the Yen lower initially, but it quickly recovered and we are now trading at the same levels we were prior to the release.
AIG Performance of Manufacturing Index (AUD/NZD)
The Australian Manufacturing Index for June came in at 38.4, although still in a state of contraction, but better than the May reading of 37.5. The market remains quiet on the first trading session of the month, first of the Japanese quarter and the 2nd half of the fiscal year for most of the western world, although the risk pairs have creeped to session highs. Looking at the AUD/NZD pair into the release, we see the pair has established some nice support at the 61.8% retracement level and looks poised to test the converging 21 day and 100 day moving averages.
GBP/USD Short-Term Retracement
After a fantastic start to the trading week for the Sterling, some negative economic indicators out of the UK and then the US (namely worse than expected UK GDP and US Consumer Confidence,) has had Cable on the run since the open of the European trading day. Looking at short-term retracement of the move from late last week to yesterday’s high’s we see some interesting technicals appear. The GBP/USD pair has found some good support at the 200 hr moving average, which has defended the pairs depreciation throughout the NY session with the 61.8% retracement of the move below it. On the topside there is the 21 hour moving average and 38.2% retracement that could resist any attempts to retrace the highs. It is also important to note the 21 day moving average which has supported the pair since the beginning of May is at 1.6368.
FXDD Today and Tomorrow: A recap of today and preview of tomorrow July 1st
FXDD Today and Tomorrow is now available for download. The concise one day report, gives a snap shot of the market near the close of trading. It also gives a picture of the trend of the major economic releases due out over the next 24 hours. To access the report click on the following link:
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Greg Michalowski
Trading forex is risky and should only be done with risk capital that will not change your lifestyle. Traders could lose all of their risk capital trading forex. FXDD does not guarantee any recommendation made within this commentary. Traders should make market assessments and take trading positions based on their own personal market analysis, risk tolerance and financial condition. In addition, care should be made to only use leverage which is congruent with your personal risk tolerance. Although care was taken in creating this report, FXDD does not guarantee the accuracy of the information
June 30 2009 Forex Market Update
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