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2013-06-18 03:03 GMT
Dollar Strengthens, Stocks Soar as Traders Position for FOMC
Yesterday we saw how much of a difference a few hours can make with the dollar recovering earlier losses to end the North American session higher against most of the major currencies. With only one day to go before the Federal Reserve's monetary policy announcement, the big move in equities and the reversal in currencies suggests that traders are beginning to position for FOMC. Yet taking a look at how the various markets are trading, there seems to be more confusion than clarity on what the central bank will say or do. The rise in the dollar and the increase in U.S. Treasury yields imply that currency and equity traders believe that the main takeaway from this week's meeting will be that the central bank is gearing up to taper. However the rally in U.S. equities suggest that stock traders believe that the Fed will make a point to distinguish tapering from tightening and reassure investors that cheap and easy money will remain available for a very long period of time. If Bernanke is successful in convincing the market that they will take a very gradualist approach to tapering, the U.S. dollar could give up its gains. However if Bernanke emphasizes the central bank's plans for tapering over its difference with tightening, the dollar could extend its rise.
CPI reading will come handy this month, just one day ahead of FED policy meeting. Lately inflation has been falling, toping this year at 2.0% in March, and pointing for another soft number, something that won’t be cheered by QE tapering fans: a reading below expected will only suggest the economy continues in slow motion, and suggest QE will be here to stay. A sudden increase in inflation won’t have a big impact as it will be just one stand-alone reading, although a huge deviation close or above 2.0%, will likely be understood as positive for the USD, at least in the short term.-FXstreet.com
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N/A
UK. BOE Inflation Letter
2013-06-18 06:00 GMT
EMU. ECB President Draghi's Speech
2013-06-18 08:30 GMT
UK. Consumer Price Index (YoY) (May)
2013-06-18 12:30 GMT
USA. Consumer Price Index (YoY) (May)
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2013-06-18 05:03 GMT
GBP/USD capped at 1.57 ahead of UK CPI
2013-06-18 04:38 GMT
EUR/USD braces for volatile week
2013-06-18 03:28 GMT
AUD/JPY hovering above 90.00
2013-06-18 02:58 GMT
GBP/JPY advances remain capped below 149.50
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EURUSD
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HIGH
1.33676
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LOW
1.33466
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BID
1.33526
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ASK
1.33527
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CHANGE
-0.1%
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TIME
08:36:46
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OUTLOOK SUMMARY
Neutral
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TREND CONDITION
Sideway
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TRADERS SENTIMENT
Bearish
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IMPLIED VOLATILITY
High
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MARKET ANALYSIS - Intraday Analysis
Upwards scenario: Current price setup might suggest volatility increase in near term perspective. If the price get acceleration on the upside and manages to surpass our resistive measure at 1.3382 (R1), we would suggest next targets at 1.3402 (R2) and 1.3422 (R3).
Downwards scenario: On the other hand, an element of supportive measures could be found at 1.3326 (S1). Clearance here would suggest possible downtrend development towards to initial targets at 1.3307 (S2) and 1.3286 (S3).
Resistance Levels: 1.3382, 1.3402, 1.3422
Support Levels: 1.3326, 1.3307, 1.3286
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GBPUSD
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HIGH
1.57227
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LOW
1.56943
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BID
1.56961
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ASK
1.56970
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CHANGE
-0.14%
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TIME
08:36:47
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OUTLOOK SUMMARY
Neutral
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TREND CONDITION
Downward
penetration
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TRADERS SENTIMENT
Bearish
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IMPLIED VOLATILITY
High
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Upwards scenario: Clearance of our next resistive structure at 1.5739 (R1) would open way towards to our initial target at 1.5766 (R2) and any further market rise would then be targeting 1.5796 (R3).
Downwards scenario: Any downside fluctuations remains for now limited to the next support level at 1.5679 (S1), only clear break here would be a signal of possible market easing towards to next targets at 1.5652 (S2) and 1.5624 (S3) in potential.
Resistance Levels: 1.5739, 1.5766, 1.5796
Support Levels: 1.5679, 1.5652, 1.5624
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USDJPY
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HIGH
94.955
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LOW
94.436
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BID
94.797
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ASK
94.799
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CHANGE
0.34%
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TIME
08:36:48
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OUTLOOK SUMMARY
Down
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TREND CONDITION
Sideway
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TRADERS SENTIMENT
Bullish
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IMPLIED VOLATILITY
High
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Upwards scenario: USDJPY stabilized on the hourly chart however appreciation above the next resistance at 95.23 (R1) might be a good catalyst for a recovery action towards to next targets at 95.66 (R2) and 96.11 (R3).
Downwards scenario: On the other hand, if the pair accelerates on the downside and manage to break our next support level at 94.26 (S1), it is likely to trigger our next support level at 93.82 (S2) and 93.37 (S3) later on today.
Resistance Levels: 95.23, 95.66, 96.11
Support Levels: 94.26, 93.82, 93.37
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