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ANALYSIS

All Eyes on Euro-Zone Data Today

A significantly better than expected British Claimant Count Change figure encouraged investors to shift their funds to higher-yielding assets during European trading yesterday. As a result, currencies like the euro and British pound saw upward movement throughout the day. Today, euro-zone news is forecasted to generate activity in the marketplace. Specifically, the German Flash Manufacturing PMI could potentially lead to more risk taking if it comes in above expectations. Additionally, traders will want to pay attention to the US Unemployment Claims figure, set to be released at 13:30 GMT.

Economic News

USD - Dollar Volatility Expected Following US Unemployment Data

The safe-haven US dollar took losses against most of its higher-yielding currency rivals during the European session yesterday, after better than expected British unemployment data led to risk taking in the marketplace. The GBP/USD gained more than 70 pips during mid-day trading, eventually reaching as high as 1.5889, before dropping back to the 1.5875 level. Against the Swiss franc, the greenback lost more than 30 pips to trade as low as 0.9276. By the beginning of the afternoon session, the dollar was steady at 0.9285.

Today, the main piece of US news is likely to be the Unemployment Claims figure, scheduled to be released at 13:30 GMT. Analysts expect the indicator to come in slightly higher than last week, which if true, may be a sign that the employment situation in the US is worsening and result in losses for the greenback during afternoon trading. That being said, traders will also want to pay attention to batch of euro-zone news during the morning session. If any of the data comes in below expectations, risk aversion may help the dollar against its main rivals.

EUR - German Manufacturing Data May Boost Euro

The euro saw upward movement against most of its main currency rivals yesterday, after positive British employment data led to risk taking in the marketplace. The EUR/USD advanced close to 70 pips during mid-day trading, eventually trading as high as 1.3353 before a slight downward correction brought the pair to 1.3340. Against the Japanese yen, the common-currency gained more than 100 pips during European trading to peak at 118.29.

Euro traders can anticipate volatility in the marketplace today, following the release of the German Flash Manufacturing PMI at 8:30 GMT. As the strongest economy in the EU, German indicators tend to have a significant impact on euro pairs. Analysts are expecting the manufacturing data to come in slightly higher than last month's, which if true, may lead to additional gains for the euro during mid-day trading. 

Gold - Gold Takes Losses amid Progress in US Debt Ceiling Talks

Gold prices increased by more than $4 an ounce during the first part of the day yesterday, following positive British employment data which led to risk taking in the marketplace. That being said, the precious metal was not able to maintain its gains, as signs of progress in talks between US lawmakers to raise the debt ceiling weakened demand among investors. Gold fell from a high of $1694.86 to $1688.90 toward the end of European trading. 

Today, gold traders will want to pay attention to a batch of euro-zone news. If either the French or German Flash Manufacturing PMI comes in above their forecasted levels, risk taking could help gold recover yesterday's losses.

Crude Oil - Oil Prices Stable Ahead of US Inventories Data

Crude oil was relatively stable throughout the day yesterday, as signs of progress in talks to increase the US debt ceiling kept prices within reach of a four-month high. The commodity traded as high as $96.89 during the mid-day session, before a slight downward correction brought prices to the $96.35 level.

Today, the US Crude Oil Inventories figure has the potential to impact oil prices. Analysts expect the indicator to come in at 2.8M, which if true, would represent a significant increase over last week, and may result in oil turning bearish during afternoon trading. 

Technical News

EUR/USD

A bearish cross has recently formed on the weekly chart's Slow Stochastic, indicating that a downward correction could take place in the coming days. This theory is supported by the Williams Percent Range on the same chart, which is currently in overbought territory. Opening short positions may be the smart choice for this pair.

GBP/USD

The Williams Percent Range on the weekly chart has crossed into oversold territory, indicating that an upward correction could occur in the near future. That being said, most other long-term technical indicators show this pair range trading, making a definitive trend hard to predict. Taking a wait and see approach may be the wise strategy until a clearer picture presents itself.

USD/JPY

The Relative Strength Index on the weekly chart has crossed into overbought territory, indicating that a downward correction could occur in the near future. This theory is supported by the Slow Stochastic on the same chart, which has formed a bearish cross. Opening short positions may be the wise choice for this pair.

USD/CHF

The Bollinger Bands on the weekly chart are narrowing, indicating that a price shift could occur in the near future. Additionally, the MACD/OsMA on the same chart has formed a bullish cross, signaling that the shift could be bullish. Opening long positions may be the best choice for this pair.

The Wild Card

USD/DKK

The Williams Percent Range on the daily chart has crossed over into oversold territory, indicating that an upward correction could occur in the near future. Furthermore, the MACD/OsMA on the same chart has formed a bullish cross. Opening long positions may be the smart choice for forex traders, before possible upward movement takes place.