The #IronFX Midday Commentary by Marshall Gittler: The dollar was virtually unchanged against most of the other G10 currencies during the European morning Tuesday. It was higher against EUR and CHF and slightly lower against NOK and NZD. The greenback remained near its opening levels against CAD, GBP, SEK, AUD and JPY. The Norwegian Krone strengthened after Norway’s CPI rose 1.8% yoy in May, the same pace as in April. The forecast was for the country’s headline inflation to have slowed to +1.7% yoy. The underlying CPI rate came at +2.3% yoy, above estimates of +2.2% yoy. In the UK, manufacturing production for April rose 0.4% from a month earlier as expected. The yoy rate rose to +4.4%, exceeding expectations of +4.0%. The UK industrial production for the month was also up by 0.4% mom as anticipated, while the yoy rate rose to 3.0% from a revised +2.5%, beating expectations of +2.8%. GBP/USD was trading below its opening levels ahead of the release, but as soon as we got the releases, it recovered to trade virtually unchanged. The pair is currently trading below the downtrend line drawn from the highs of May, but in the shorter-term picture it oscillates between the support of 1.6780 and the resistance of 1.6845 since Thursday. The South African Rand was the main loser among the EM currencies that we track after SARB Governor Gill Marcus said that there is concern about South Africa’s growth for Q2 amid the strike at platinum mines. USD/ZAR is trading above the 10.6600 zone and I would expect it to target the hurdle of 10.9700 in the future. USD/NOK moved lower after Norway’s CPI rose more than anticipated, but recovered a big portion of its losses within the following hours. At the time of writing, the pair is trading slightly below the resistance barrier of 5.9750 (R1) and below the lower boundary of the prevailing uptrend channel. Considering that we have the possibility for a lower high near that strong resistance zone, while, on the other hand the rate remains supported by the 5.9400 (S1) zone since the 22nd of May, I would keep a neutral stance for now. A dip below the 5.9400 (S1) zone is needed to confirm a forthcoming lower low and to turn the outlook to the downside. Alternatively, a break above the resistance of 5.9750 (R1) could bring the rate back within the uptrend channel and signal that the declined trigger on Thursday was just a corrective phase. Join #IronFX to stay up to date on #Forex bit.ly/1aqAsOw
Posted on: Tue, 10 Jun 2014 11:16:36 +0000
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