European Open Japans Exports Rise to 11yr High Futures Point to Firmer Open

EUR/USD is still holding up well after its initial fall from the FOMC statement on Wednesday. Yesterday, it saw some good buying from below the 1.12 level, with the Eurozone economic confidence rising to 6-month highs. The market however overcame the German inflation data hitting a negative figure for the first time since 2009, in a possible sign that the market is expecting the rise in inflation in the coming months once the QE starts. Today the main event for the EU will be the Eurozone CPI flash estimate, which is expected to fall year on year from -0.2% to -0.5%. However, if the reaction to the German data is anything to go by, perhaps this won’t have an effect.

The USD has been on a positive run since the FOMC indicated it wasn’t overly concerned about the drop in oil, even though it may cause a drop in inflation in the short-term. Overnight comments from senators suggest that no rate rise is on the horizon, as there are concerns abroad. The US dollar has fallen against most at the start of this trading session, possibly on the back of this information. Today’s data will be a test as the Advanced GDP q/q is released expecting a fall from 5% to 3%.

USD/CAD is still continuing its impressive run now hitting 6-year highs with oil prices and the Fed keeping the CAD weak.

Sterling has found it hard to hold above the 1.5200 level since the FOMC statement and yesterday’s better than expected US jobless claims. With no data being released today, we look towards Monday’s data of the ISM manufacturing PMI.

Overnight the Tokyo CPI data was released lower than expected, causing a slight sell-off in USD/JPY which has held with the weakness of the USD into this early trade session.

The Aussie had a big sell-off yesterday, with chatter around that the RBA will be cutting rates to 2% from 2.5% next week. The AUD had a bounce last night as the PPI gives it some respite until next week’s announcement.

EUR/USD
Supports 1.1275-1.1215-1.1170 | Resistance 1.1380-1.1430-1.1490

USD/JPY
Supports 117.70-117.20-116.80 | Resistance 118.70-119.05-119.60

GBP/USD
Supports 1.5010-1.4940-1.4865 | Resistance 1.5150-1.5230-1.5300

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