Euro and Pound May Fall on Data, US Dollar Eyes FOMC Minutes...

TALKING POINTS – BRITISH POUND, CPI, EURO, PMI, US DOLLAR, FOMC UK CPI downtick may cool BOE policy outlook, hurt British Pound Euro may decline as soft PMI data compounds Italy-linked pressure Hawkish tone in FOMC minutes may put US Dollar on the offensive UK CPI data tops the economic calendar in European trading hours. The headline inflation rate is expected to hold steady at 2.5 percent but the core reading excluding volatile items like energy prices is forecast to tick down to 2.2 percent, the lowest in 13 months. Leading activity surveys bolster the case for disinflation, with a downside surprise likely to push back BOE rate hike bets and hurt the British Pound. The preliminary set of April’s Eurozone PMI readings is also due. Steady overall results are expected despite a slight slowdown in manufacturing. Persistent underperformance in regional data relative to forecasts since late November 2017hints that analysts’ models imply a rosier worldview than reality has ratified. That opens the door for another disappointment that may dim near-term QE unwind prospects, punishing the Euro. Later in the day, minutes from May’s FOMCArticle source:...

US Dollar Back to 2018 Highs as Equities Take a Bearish Turn...

Talking Points: – The Dow looks set to gap-lower this morning as US Dollar strength continues. The weekend-gap that we looked at yesterday in the Dow has now been filled, and we’re now testing an area of support that held-up the lows throughout last week. – Elsewhere – support has not been so friendly. The Euro is digging deeper into the zone that helped to hold the lows for the latter-portion of last year, and GBP/USD has been in hard-sell mode as another disappointing release of UK inflation numbers make the prospect of tighter policy from the BoE even more distant. – DailyFX Forecasts have been updated for Q2, and are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide. Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment Indicator. Dollar Rallies Back to ResistanceArticle source:...

USD/JPY Forecast: RSI Flashes Sell Signal Ahead of FOMC Minutes...

JAPANESE YEN TALKING POINTS USD/JPY tumbles lower ahead of the Federal Open Market Committee Minutes to fill the gap from earlier this week, and the recent selloff may gather pace over the 24 hours of trade should the policy statement dampen bets for four rate-hikes in 2018. At the same time, recent price action raises the risk for a further decline in dollar-yen as the exchange rate snaps the series of higher highs lows from the previous week, while the Relative Strength Index (RSI) flashes a textbook sell signal as the oscillator falls back from overbought territory. DOLLAR-YEN FILLS GAP, RELATIVE STRENGTH INDEX (RSI) FLASHES SELL SIGNAL AHEAD OF FEDERAL OPEN MARKET COMMITTEE (FOMC) MINUTES USD/JPY remains under pressure as the update to the New Home Sales report does little to boost the outlook for U.S. economy, and the FOMC Minutes may fuel the recent decline in the dollar-yen exchange rate as ‘the federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run.’ Even though the FOMC appears to beArticle source:...

FX Markets Look to EZ PMIs, UK CPI, FOMC Minutes...

Talking Points: – After zero ‘high’ rated events last week, the UK represents more than half of all top billed releases and speeches on the calendar: CPI is on Wednesday and GDP is on Friday. – The US Dollar rally may stall with the May FOMC minutes and April US Durable Goods Orders due out between Wednesday and Friday. – The Euro, desperate for a lifeline, may not get one with the preliminary May PMI readings due out on Wednesday. Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below. 05/23 Wednesday | 08:00 GMT | EUR Eurozone PMI Composite (MAY P) The only significant data due out in the week ahead for the Euro out are the initial May PMI readings. The mix of individual country releases at the start of the week will culminate in stagnant readings in the cumulative Eurozone PMIs due out on Wednesday (no change or declines are anticipated). Notably, the composite reading is due in at 55.1 unchanged. Although there hasArticle source:...

Crude Oil Prices Hit 4-Year High But Chart Setup Warns of Topping...

CRUDE OIL GOLD TALKING POINTS: Crude oil prices rise to four-year high on US/China de-escalation Technical setup still hints at topping, API inventory data in focus Gold prices precariously cling to trend support, but for how long? Crude oil prices rose as the markets’ mood brightened amid signs of de-escalation in US/China trade tensions, as expected. Interestingly, gold prices also rose as the exuberant mood translated into a weaker US Dollar. Commodity-linked and emerging market currencies geared to the global business cycle soared against the greenback, echoing as an overall down move. That understandably lifted the go-to anti-fiat asset. GOLD MAY RETREAT AS FOMC MINUTES LOOM, OIL EYES API DATA Looking ahead, investors’ initial exuberance may cool absent specifics of a lasting US/China accord. In turn, this may allow Fed policy speculation to reclaim its perch as the central concern for financial markets before minutes from the May 2 FOMC meeting cross the wires Wednesday. That might discourage overexposure to short-USD positions and send the greenback higher amid profit-taking, pressuring gold prices. As for crude oil, they will be looking toArticle source:...

Pound Looks to BOE Testimony for Direction, US Dollar May Bounce...

TALKING POINTS – BANK OF ENGLAND, BRITISH POUND, US DOLLAR, YEN, FOMC Yen higher as markets digest US/China trade war de-escalation US Dollar may rebound as the spotlight turns to FOMC minutes British Pound looks to testimony from BOE officials for direction The Yen edged up in otherwise quiet Asia Pacific trade, with the G10 FX space settling into digestion mode following yesterday’s fireworks. Commodity-bloc currencies notched up impressive gains as risk appetite firmed after China and the US opted against an all-out trade war, at least for now. Not surprisingly the chipper mood weighed on the anti-risk Japanese unit. Today’s upswing seems corrective in that context. From here, the celebratory mood may give way to a bit of sober reflection. No formal deal between the world’s top-two economies has been stuck, making this a temporary lull in hostilities that may yet crumble. Investors are unlikely to know for sure until formal negotiations run their course, which may take months. In the meantime, the focus may turn to Wednesday’s release of minutes from May’s FOMC meeting. The upsurge in commodity-linked and emerging marketArticle source:...