Mid-Day Report: USDJPY Soft after Weak US Data, EURUSD Rally Short Lived
Dollar is weighed down against yen by weaker than expected economic data in the early US session. Industrial production unexpectedly fell -0.7% in Apr. Capacity utilization also dropped below 80% for the first time since 2005 to 79.7%. Empire state manufacturing index also fell back to negative territory at -3.23 in May after prior month's rebound. Though, Philly Fed index was above expectation at -15.6. Jobless claims climbed to 371k. The brighter spot today is TIC capital flow which rose sharply to 80.4b in Mar.
Technically speaking, the strength in yen is relatively more apparent than weakness in the greenback as european majors are mildly lower against both the dollar and yen. But after all, the range is tight. More choppy consolidation is in favor .
Euro was lifted earlier today after stronger than expected Germany Q1 GDP which grew at the fastest pace of 1.5% qoq in Q1, boosting yoy rate from 1.6% to 1.8%. Eurozone Q1 GDP also beat expectations by growing 0.7% qoq, 2.2% yoy. Eurozone HICP final in Apr was confirmed at 0.3% mom and 3.3% yoy, down from prior 1.0% mom, 3.6% yoy. Nevertheless, the rally was short lived.
Released overnight, Japanese machine orders dropped sharply by -8.3% mom in Mar, with yoy rate dropping -6.2%. New Zealand retail sales was surprisingly weak in Mar, falling -1.2%. Kiwi was sent sharply lower across the board after the release. Meanwhile, Aussie benefits from cross buying in AUD/NZD.
GBP/USD Mid-Day Outlook
Daily Pivots: (S1) 1.9390; (P) 1.9432; (R1) 1.9499; More
Cable continues to engage in choppy sideway trading in tight range above 1.9363 today. Outlook remains unchanged. Downside momentum continues to diminish as seen in bullish convergence condition in 4 hours MACD and RSI. While further decline could be seen, downside is still expected to be contained by 1.9337 low and bring rebound. Above 1.9636 resistance will be the first alert that whole corrective fall from 2.0391 has completed. Further break of the falling trend line resistance (now at 1.9764) will add more credence to this case and bring stronger rally towards 2.0029 resistance first.
In the bigger picture, down trend from 2.1161 have made a low at 1.9337. Rebound from there should have completed with three waves up to 2.0391, which is corrective in nature. Subsequent fall from there also display a corrective structure too. In other words, wide range consolidation from 1.9337 is expected to extend further. Hence, current fall from 2.0391 will likely be contained by 1.9337 support and be followed by another rise to retest 2.0391 resistance or above before completing the consolidation.
Forex News Digest
- Philadelphia Fed's May Manufacturing Survey at Highest Level in Five Months
- U.S. Industrial Production Consistent with Recessionary Levels, Economists Say
- Rising U.S. Jobless Claims at Odds with Payrolls Report, Economist Says
- U.S. Jobless Claims Rise to 371k
- Empire State Manufacturing Index Falls Back Into Negative in May
- German Inflation Falls 0.2% As Expected in April Following Early Easter
- Surprise Jump in German GDP Growth Due to Foreign Trade, Domestic Consumption
- The Day Ahead Canada & U.S.: U.S. Philly Fed, Empire State Manufacturing Surveys
- U.S. Preview: Philly Fed Manufacturing Survey to Stay in Decline
- Wednesday's News Recap: Soft U.S. CPI Report, Increase in Canadian Home Listings
- BOE Report Worrying, Lays Chances of June Rate Cut to Rest, Economists Say
- Euro Rises Against Dollar, Yen After Germany's Economic Growth Accelerates
- Industrial Production in U.S. Probably Dropped in April, Led by Auto Slump
- British Pound Falls Against Euro, Is Little Changed Versus U.S. Dollar
- German Economic Growth Accelerated to Fastest in 12 Years in First Quarter
- Swiss Consumer Climate Falls More Than Economists Forecast as Outlook Dims
- New Zealand Dollar Falls on Retail Sales Report; Australian Dollar Rises
- Yen May Fall to 107 per Dollar on Technical Charts, Daiwa's Kinouchi Says
More Forex News
Economic Indicators Update
| GMT |
Ccy |
Events |
Actual |
Consensus |
Previous |
Revised |
| 22:45 |
NZD |
New Zealand Retail sales M/M Mar |
-1.20% |
N/A |
-0.70% |
|
| 23:50 |
JPY |
Japan Machine orders M/M Mar |
-8.30% |
-5.20% |
-12.7 |
-12.3 |
| 23:50 |
JPY |
Japan Machine orders Y/Y Mar |
-6.20% |
1.00% |
2.40% |
|
| 06:00 |
EUR |
Germany CPI final M/M Apr |
-0.20% |
-0.50% |
0.50% |
|
| 06:00 |
EUR |
Germany CPI final Y/Y Apr |
2.40% |
2.40% |
3.10% |
|
| 06:00 |
EUR |
Germany HICP final M/M Apr |
-0.30% |
-0.30% |
0.50% |
|
| 06:00 |
EUR |
Germany HICP final Y/Y Apr |
2.40% |
2.60% |
3.30% |
|
| 06:00 |
EUR |
Germany GDP Q/Q Q1 |
1.50% |
0.70% |
0.30% |
|
| 06:00 |
EUR |
Germany GDP Y/Y Q1 |
1.80% |
1.80% |
1.60% |
|
| 09:00 |
EUR |
Eurozone GDP Q/Q Q1 |
0.70% |
0.50% |
0.40% |
|
| 09:00 |
EUR |
Eurozone GDP Y/Y Q1 |
2.20% |
1.90% |
2.20% |
|
| 09:00 |
EUR |
Eurozone HICP final M/M Apr |
0.30% |
0.30% |
1.00% |
|
| 09:00 |
EUR |
Eurozone HICP final Y/Y Apr |
3.30% |
3.30% |
3.60% |
|
| 12:30 |
USD |
U.S. Jobless claims |
371K |
370K |
365 K |
|
| 12:30 |
USD |
U.S. Empire state mfg May |
-3.23 |
0.6 |
0.63 |
|
| 13:00 |
USD |
U.S. Foreign treasury buys Mar |
55B |
N/A |
20.6 B |
|
| 13:00 |
USD |
U.S. Net LT TIC flows Mar |
80.34B |
62.5 B |
72.5 B |
64.9B |
| 13:15 |
USD |
U.S. Capacity utilisation Apr |
79.70% |
80.30% |
80.5 |
|
| 13:15 |
USD |
U.S. Industrial prod'n M/M Apr |
-0.70% |
-0.10% |
0.30% |
|
| 14:00 |
USD |
U.S. Philadelphia Fed survey May |
-15.6 |
-20 |
-24.9 |
|
| 17:00 |
USD |
U.S. NAHB housing mrkt index Mar |
|
20 |
20 |
|
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