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Forex pairs in this Article » AUD/USD, GBP/USD, EUR/USD, USD/JPY
THE TAKEAWAY: USD Gross Domestic Product (Annualized) (1Q T) +1.8% versus 2.4% expected, from 2.4% > EURUSD moves down to $1.3000

There were two significant news events today. The first was the Bank of England Financial Stability Report, which stated that banks would be vulnerable to sudden increases in interest rates. The report failed to produce any immediate reaction in the GBPUSD, although the GBPUSD is trading modestly lower on the day. The second noteworthy event was the US GDP release. Because this was the third print, markets do not typically react as strongly as earlier prints, but the figure missed sharply today, which caused a sell-off in the USD. The annualized figure came in at +1.8%, versus the Bloomberg News survey expected 2.4%.

This sell-off in the dollar was short-lived however as the USD is now experiencing heavy gains towards London Close. At the time of writing, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) gains net +18 (+0.16%) on the day to 10768. Taking a cross-sectional view on the other major asset classes, commodities seem to be the worst hit today. Crude oil is trading heavy while precious metals are deeply lower today: WTI -0.93%; Brent -0.60%; Gold -3.44% (to 1233.74); Silver -4.63% (to 18.74); COMEX Copper -0.85%; Shanghai Copper +0.54% at the time of writing. Most of the LME and Shanghai-exchange traded base metals closed the day higher while COMEX base metals are trading widely lower.

On the other hand, bond and equity markets are trading higher on the day. Bond prices have been crushed in the last week but this trend reversed today as 10YR government bond yields are broadly lower in the US and Europe: US -5.6bps (-2.14%) to 2.552%; Germany -4.1bps (-2.27%) to 1.762%; Italy -15.3bps (-3.15%) to 4.695% at the time of writing. Regarding equities, major global exchanges ex-Nikkei are up today: S&P +0.52%; Euro Stoxx +2.32%; FTSE +0.97%; Nikkei -1.04%; Hang Seng +2.43% at the time of writing.

AUDUSD 15-minute Chart: June 26, 2013

Market_Tensions_Slowly_Ease_as_Gold_and_Silver_Performance_Still_Abysmal_body_Picture_4.png, Market Tensions Slowly Ease as Gold and Silver Performance Still AbysmalCharts Created using Marketscopeprepared by Kevin Jin

The AUDUSD is trending higher today, with the pair gaining +39 pips (+0.42%) to $0.9297 at the time of writing. The pair hovered around .9250 for much of the Asian session before breaking out higher beginning London Open. The pair reached as high as .9343 before a bear rally, starting at 14:00 GMT (10:00 EDT on chart above), pushed the AUDUSD back below .9300.

GBPUSD 15-minute Chart: June 26, 2013

Market_Tensions_Slowly_Ease_as_Gold_and_Silver_Performance_Still_Abysmal_body_Picture_3.png, Market Tensions Slowly Ease as Gold and Silver Performance Still AbysmalCharts Created using Marketscopeprepared by Kevin Jin

The GBPUSD is modestly lower today, falling -92 pips (-0.59%) to $1.5328 at the time of writing. The cable attempted to stay above 1.5400 but was ultimately unable to hold this support level early into the London session. The pair attempted to make a run at 1.5400 again after the aforementioned US GDP miss, but was unable to sustain the bullishness. The GBPUSD sold off largely into London Close, making it the seventh day of declines in the last nine trading days.

EURUSD 15-minute Chart: June 26, 2013

Market_Tensions_Slowly_Ease_as_Gold_and_Silver_Performance_Still_Abysmal_body_Picture_2.png, Market Tensions Slowly Ease as Gold and Silver Performance Still AbysmalCharts Created using Marketscopeprepared by Kevin Jin

The EURUSD continues its fifth day of declines in the last six days, falling -71 pips (-0.54%) to $1.3004 at the time of writing. The pair is trading down to the psychologically important 1.3000 level, which generally lines up with the monthly central pivot as well as the weekly S1 pivot. The pair did briefly did dip below the 1.3000 mark today; the EURUSD has not closed below 1.3000 since May 31.

USDJPY 15-minute Chart: June 26, 2013

Market_Tensions_Slowly_Ease_as_Gold_and_Silver_Performance_Still_Abysmal_body_Picture_1.png, Market Tensions Slowly Ease as Gold and Silver Performance Still AbysmalCharts Created using Marketscopeprepared by Kevin Jin

The USDJPY managed to break below ¥98.00 early in the Asian session and has not managed to regain that level through London or New York trading. The pair is net down -34 pips (-0.34%) to 97.45 at the time of writing. The USDJPY moved around 97.50 for most of the London and New York trading. This is the third straight day of somewhat limited USDJPY movement after high volatility last week.

--- Written by Kevin Jin, DailyFX Research

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