27 Jul 2015
Yen - top gainer in Asia, German Ifo, US durable goods eyed
FXStreet (Mumbai) - Broad based US dollar weakness remained the underlying theme in a rather data-quiet Asian session, with the Japanese yen emerging the top performer across the FX space. While the Aussie poses tepid recovery from fresh six-year lows and struggles below 0.73 handle. While the NZD/USD pair also extended gains, albeit failed to regain 0.6600 levels.
Key headlines in Asia
EUR/USD hovers around 1.1000 – key levels
Key events ahead for a busy week - Rabobank
Dominating themes in Asia - centered on JPY, AUD, NZD
An eventless Asia, with the Antipodeans boosted on broad USD weakness after an unexpected drop in the US new home sales figures reported on Friday continues to weigh on the reserve currency.
The Aussie faced rejection at 0.7299 and now consolidates around 0.7280 levels as lower gold and oil prices continue to keep the gains checked. While Kiwi also edged higher, reversing previous losses, as markets now await fresh incentives from a heavy US macro data-led week ahead. USD/JPY came under fresh selling pressure after the Asian traders ditched the US currency mulling over Friday’s lack lustre home sales data from the US.
Chinese stocks drives the Asian indices lower with the Shanghai composite index losing nearly -2.5% at 3971. The Australian benchmark the ASX 200 bucks the trend and trades 0.18% higher around 5575. The Nikkei 225 in Tokyo fell -1.10% at 20315 on strengthening yen. South Korea’s Kospi trades -0.16% at 2042.
Heading into Europe - centered on EUR, GBP
A relatively lighter start to the busy EUR, US calendar ahead, with only a couple of economic releases from Germany and the Euro zone to be reported in the upcoming session.
A closely watched survey, the Ifo Business Climate Index in Germany, is expected to edge up to 107.5 in July, from the 107.4 booked in the sixth month of the year.
The Current Assessment sub-index is seen edging lower to 113.0, after posting a figure of 113.1 a month ago. The Ifo Expectations Index - indicating firms' projections for the next six months - is projected to remain at 102.0 as in June.
The North American session sees the release of the June durable goods orders report, with Wall Street analysts expecting a solid 3% rebound in total orders.
More important will be data on core shipments that will impact the estimates of business investment in the second quarter ahead of the advance estimate due on Thursday. Core orders, meanwhile, could help to adjust the Fed's outlook for capital spending.
Analysts at Deutsche bank note, "Our best guess is that core orders will rebound modestly in June given the recent stabilization in the manufacturing ISM - new orders averaged 55.1 in Q2, up from 52.1 in the prior quarter."
EUR/USD Technicals
Valeria Bednarik, chief analyst at FXStreet explained, "The EUR/USD pair is developing within a daily descendant channel coming from June high at 1.1435 with the roof currently around 1.1050/80 for the upcoming days, which means that unless the pair advances beyond these levels, the upward movements are mostly seen as corrective. Daily basis, the bearish potential is intact as the pair remains below its 20 SMA, whilst the technical indicators are resuming the downside after failing around their mid-lines."
"In the 4 hours chart, however, the price is holding above a bullish 20 SMA around 1.0950, whilst the Momentum indicator heads higher above the 100 level, all of which should keep the downside limited in the short term. At this point, the pair needs to accelerate below the support at 1.0910 to confirm a new leg lower towards the 1.0860 region."
Key headlines in Asia
EUR/USD hovers around 1.1000 – key levels
Key events ahead for a busy week - Rabobank
Dominating themes in Asia - centered on JPY, AUD, NZD
An eventless Asia, with the Antipodeans boosted on broad USD weakness after an unexpected drop in the US new home sales figures reported on Friday continues to weigh on the reserve currency.
The Aussie faced rejection at 0.7299 and now consolidates around 0.7280 levels as lower gold and oil prices continue to keep the gains checked. While Kiwi also edged higher, reversing previous losses, as markets now await fresh incentives from a heavy US macro data-led week ahead. USD/JPY came under fresh selling pressure after the Asian traders ditched the US currency mulling over Friday’s lack lustre home sales data from the US.
Chinese stocks drives the Asian indices lower with the Shanghai composite index losing nearly -2.5% at 3971. The Australian benchmark the ASX 200 bucks the trend and trades 0.18% higher around 5575. The Nikkei 225 in Tokyo fell -1.10% at 20315 on strengthening yen. South Korea’s Kospi trades -0.16% at 2042.
Heading into Europe - centered on EUR, GBP
A relatively lighter start to the busy EUR, US calendar ahead, with only a couple of economic releases from Germany and the Euro zone to be reported in the upcoming session.
A closely watched survey, the Ifo Business Climate Index in Germany, is expected to edge up to 107.5 in July, from the 107.4 booked in the sixth month of the year.
The Current Assessment sub-index is seen edging lower to 113.0, after posting a figure of 113.1 a month ago. The Ifo Expectations Index - indicating firms' projections for the next six months - is projected to remain at 102.0 as in June.
The North American session sees the release of the June durable goods orders report, with Wall Street analysts expecting a solid 3% rebound in total orders.
More important will be data on core shipments that will impact the estimates of business investment in the second quarter ahead of the advance estimate due on Thursday. Core orders, meanwhile, could help to adjust the Fed's outlook for capital spending.
Analysts at Deutsche bank note, "Our best guess is that core orders will rebound modestly in June given the recent stabilization in the manufacturing ISM - new orders averaged 55.1 in Q2, up from 52.1 in the prior quarter."
EUR/USD Technicals
Valeria Bednarik, chief analyst at FXStreet explained, "The EUR/USD pair is developing within a daily descendant channel coming from June high at 1.1435 with the roof currently around 1.1050/80 for the upcoming days, which means that unless the pair advances beyond these levels, the upward movements are mostly seen as corrective. Daily basis, the bearish potential is intact as the pair remains below its 20 SMA, whilst the technical indicators are resuming the downside after failing around their mid-lines."
"In the 4 hours chart, however, the price is holding above a bullish 20 SMA around 1.0950, whilst the Momentum indicator heads higher above the 100 level, all of which should keep the downside limited in the short term. At this point, the pair needs to accelerate below the support at 1.0910 to confirm a new leg lower towards the 1.0860 region."