Euro down to the 1.2213 level and the Pound is negatively affected by the negative data last week

The pound and the euro extended gains toward cycle highs while the yen rose as BOJ is seen mulling a change in policy communication.

Euro down to the 1.2213 level and the Pound is negatively affected by the negative data last week

Euro and Pound down

The December retail sales in the United Kingdom failed miserably as the expectation was at -0.8%, and the actual came in at -1.6%, almost double the decline even though Christmas was around that time. This fueled the UK to drop after a slight rise in the pair.

 

In terms of the stock market, Europe’s Stoxx 600 rose 0.5% and was poised to close at the highest level since August 2015, and S&P futures have rebounded, wiping out all of yesterday’s losses. The Dax is outperforming, led by ThyssenKrupp after they confirmed their targets and BASF who continue to rally after their positive trading update late yesterday.

 

In commodities, WTI and Brent and crude futures trade lower with markets keeping a close eye on US production after the DoE inventory data on Thursday and following monthly oil market reports from OPEC and the IEA.

 

OUTLOOK

However, traders are watching the impending doom of the U.S. government should a budget consensus not be reached. The Fed’s speech calendar includes Bostic on the economy in US morning, while Quarles spoke on bank regulation.

 

TRADERS VIEW

The Dollar extended its recent run lower amid concerns over a potential U.S. government shutdown. Treasuries and euro-area bonds fluctuated as equities enjoyed a day in the green. The pound and the euro extended gains toward cycle highs while the yen rose as BOJ is seen mulling a change in policy communication. Emerging-market currencies rose to a fresh six-year high while crude oil slipped a second day.

 

GBPUSD –  GBPUSD A Bullish Thursday session turns bearish after post-data movement on the pound sent the Cable towards day lows of 1.3865.

GBP/USD

USDJPY – The 110.15 Fibonacci support back on the radar screen after mid-week key day reversal higher lacked follow-through bull action.

USD/JPY

EURUSDEURUSD Mid-week bearish key day reversal fails to secure next day validation. Friday’s higher high keeps bull theme still dominant.

EUR/USD

AUDUSD – The Aussie finished Thursday above the 0.80 for the first time since September to restore receding bullish momentum. The market is testing the relationship with the 233-week MA at 0.8030.

AUD/USD

USDCHF – The pair is violating the 0.9567 Fibonacci support, which creates air pockets as nothing meaningful in the way up to next pivotal support at 0.9421, at the 2017 low.

USD/CHF

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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.

 

HIGH RISK WARNING:

Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

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