Intraday Market Thoughts

USD Jolted Upwards, EUR/JPY Below 200-DMA

by Adam Button
Jun 10, 2014 23:30

The euro was soft Tuesday as yield differentials continue to weigh but the story was a break of several technical levels. On the day NZD was the top performer ahead of tomorrow's central bank decision while EUR lagged. Japanese business sentiment is due later.

Rising Treasury yields helped to underpin the US dollar as 10-year yields rose to 2.64%. Dollar buying accelerated after April JOLTS surged to a seven-year high of 4455K compared to 4050K expected. The jump in job ads will embolden the Fed bulls and helps to confirm the positive pace of the labor market.

Technicals were in focus as the euro continued to give back the post-ECB gains. The major development was in EUR/JPY as it closed below the 200-day moving average for the first time since late 2012. The pair remains above the late May low of 137.98 but the downside is coming into focus.

One headline that weighed on the euro was the ECB's Mersch saying several banks will need considerable write offs.

A similar technical break came in USD/CHF as I closed above the 200-dma for the first time this year. Ashraf writes more about this pair in the Premium Section.

Keep a close eye on WTI crude oil in the day ahead as it flirts with the $105 zone. That area has capped crude twice this year and inventory numbers are due.

Economic data in the hours ahead is generally second-tier but a spot to watch is the Japanese quarterly business sentiment index at 2350 GMT. The BSI large manufacturers index was 12.5 in Q1. At the same time the Corporate Goods Price Index is due and expected up 0.1% in May.

Our last 3 Premium longs in EURUSD have hit their final targets, with 150-pips in each trade. But last Thursday (4 hours before the ECB decision), we issued 2 EURUSD shorts, each of which is 80 and 100 pips respectively. Today, we issue a 2nd trade in USDCHF with 2 key charts identifying key moving average crossovers and a triple top in CHF futures commitments. The existing USDCHF trade is +90 pips in the black.  These latest USDCHF charts are shown on the right-hand side icon of the trades box. Meanwhile, Both EURAUD shorts hit their final targets with a total of 590 pips. All these trades ideas are in the latest Premium Insights.
Act Exp Prev GMT
JOLTS - Job Openings (APR)
4.455M 4.166M Jun 10 14:00

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