Friday’s numbers helped Pound and Euro scream to the upside and recover any losses earlier in the week. Most of this week, EUR/USD had been working on a possible weekly closing price reversal until Friday’s rally. The current upside momentum indicates that this market may be poised to test the high for the year at 1.4330 level in EUR/USD. If momentum continues, the Euro may see 1.4500 fairly easily. I will be looking for some kind of correction from the sharp rally on Friday but after that, will be cautiously long.
Cable closed above the 1.670 level which was stiff resistance for quite sometime. GBP/USD and EUR/USD are both in position to possibly breakout to the Upside. If indeed the Pound and Euro breakout, I feel it will be sharp due to short covering and trigger happy bidders.
The USD CAD tested the low for the week and closed in a position to break support and head lower.
- US Q2 GDP falls 1.0% slightly better than expected, consumer spending weak; Q1 revised much weaker, down -6.4%
- NY City NAPM rises to 48.3 from 44.8
- Chicago PMI rises to 43.4 in July from 39.9, slightly better than expected
- IMF: Dollar moderately overvalued
- JP Morgan raises Q3 GDP forecast to 3%
- Fitch maintains UK AAA rating
- Cash for clunkers success has economists forecasting a jump in US auto production in second half with positive GDP impact
- Obama: Guardedly optimistic economy has turned quarter
- ECB Sources: ECB preparing further non-standard measures in case rebound does not take hold- Market News International
- US equities ended essentially unchanged, rise 7.8% on the month; bond yields fall 12 bp after mixed GDP, auction aftermath
- Oil rises 3.2% to $69.05, Copper rises 2.5%, CRB index up 1.7%
Risk appetite in equity markets continue to put the Yen under selling pressure.
