EUR/USD Technical Outlook: Euro Rises Most Since January as Officials Increase Greece Financial Aid

The euro gained the most against the dollar in four months this week after Greece was given more assistance to address its debt crisis, boosting confidence the region’s nations will be able to meet their obligations. Europe’s shared currency reached a four-week high yesterday after Luxembourg’s Jean-Claude Juncker, who leads the group of euro-area finance ministers, said they agreed to pay the next installment to Greece under last year’s 110 billion-euro ($161 billion) bailout. The U.S. currency dropped to a record against the Swiss franc after the jobless rate unexpectedly rose to 9.1 percent. European Central Bank policy makers may consider increasing interest rates when they meet next week. “People are taking the package as a positive factor,” said David Mann, regional head of research for the Americas at Standard Chartered Plc in New York. “Combined with the relative performance of the data out of the U.S. versus Europe, that has been a positive for now for the euro.” The euro rose 2.2 percent to $1.4635, from $1.4319 May 27, and touched $1.4643, the highest level since May 5. It was the currency’s biggest weekly gain since Jan. 14. It added 1.6 percent to 117.48 yen, from 115.67 last week. The dollar dropped 0.6 percent to 80.34 yen, from 80.80.

Peer Gains

The euro was the biggest weekly winner against nine other currencies of developed nations measured by the Bloomberg Correlation-Weighted Indexes. It rose 1.6 percent, followed by a 1.2 percent gain in the Swiss franc and a 1.1 percent advance in the Norwegian krone. European Union and International Monetary Fund officials agreed to pay the next installment to Greece under last year’s bailout, paving the way for an upgraded aid package that includes a “voluntary” role for investors. Greece’s government said a review of the country’s economic progress concluded “positively.”

FOREX-Euro holds near 1-mth high vs dlr before U.S. jobs-BOOKED+450 PIPS

Took a trade today based on Non-Farm Payroll News. We entered the market two hours after news release. Entry point was around 1.45820- Took profit at 1.46262.  Booked about 450 Pip. 


Key to our trade: Support/Resistance broke through at 4week high, gave us entry, also EMA Cross indicated the trend direction.

EUR/USD: The dollar immediately sank in the wake of poor non-farm payrolls data that fueled concern over the state of the U.S. economy. A Dow Jones poll of economists anticipated May non-farm payrolls to have risen by 160,000 in May from a month ago but the data showed a rise of only 54,000. The U.S. currency traded off even after expectations were scaled back for the closely-watched jobs indicator in recent days. A slew of poor U.S. data and a dismal ADP Employer Services report Wednesday preceded Friday's report. Adding downward pressure on the dollar, Moody's Investors Service warned Thursday it might place the U.S. government's debt rating under review for a possible downgrade as early as next month. 

US Non Farm Payrolls Ahead

U.S. Dollar Trading (US) despite no reversal in stock markets the USD came under heavy selling pressure on a combination of negative news and weak US data. Moody’s warned that the US could be put on negative review if the debt ceiling issue is not resolved. Weekly Jobless claims at 422k vs. 415k forecast. In US stocks, DJIA -41 points closing at 12248, S&P -1 points closing at 1313 and NASDAQ +4 points closing at 2773. Looking ahead, May NFP forecast at 150k vs. 244k previously. The Unemployment Rate forecast at 8.9% vs. 9% previously. May ISM Services forecast at 54 vs. 52.8 previously.

The Euro (EUR) was the strongest currency in the market able to rebound to fresh multi week highs on talk a Greece solution was close. This combined with the US Debt rating news to help the EUR/USD break above 1.4500. ECB President Trichet spoke overnight about the possibility of a single EU Finance Ministry. Overall the EUR/USD traded with a low of 1.4323 and a high of 1.4515 before closing the day around 1.4500 in the New York session. Looking ahead, May EU PMI Services forecast unchanged at 55.4.

WORLD FOREX: Dollar Falls Vs Euro On US Econ Pessimism

The euro edged up against the dollar on Thursday in Asia as recent weak U.S. economic indicators prompted investors to speculate that the Federal Reserve may end up taking additional easing measures in the months ahead. U.S. data released Wednesday by the Institute for Supply Management showed its manufacturing purchasing managers' index fell to 53.5 in May from 60.4 in April, below the 57.0 expected.

Separately, private-sector jobs in the U.S. rose by just 38,000 last month, according to a national employment report published by payroll giant Automatic Data Processing and consultancy Macroeconomic Advisers. The consensus forecast was for a 190,000 gain. The result bodes ill for Friday's much-anticipated non-farm payrolls data. Traders said market participants are increasingly pessimistic about the U.S. outlook as some of them even started to speculate that the Fed may go ahead with further quantitative easing measures in the months ahead. If the U.S. data to be released over the coming days, such as Friday's jobs data, turn out to be weaker than expected, "speculation over a QE3 program will balloon, damaging the dollar. As of 0450 GMT, the euro was at $1.4365 from $1.4334 in New York on Wednesday and Y116.29 from Y115.99. The dollar, meanwhile, is at Y80.94 from Y80.96. The ICE Dollar Index, which tracks the U.S. dollar against a basket of currencies, was at about 74.767 from 74.844.

Asian Currencies Slide as U.S. Data, Greek Downgrade Deter Risk Taking

Stocks Fall most in 2 Months, Risk Off

U.S. Dollar Trading (US) a shocking ADP jobs report combined with a slump in the US manufacturing ISM to send stocks down over 2%. May ADP private payrolls at 38k vs. 177k previously. May ISM Manufacturing dropped to 53.3 vs. 60.4 previously. In US stocks, DJIA -279 points closing at 12290, S&P -30 points closing at 1314 and NASDAQ -66 points closing at 2769. Looking ahead, Weekly Jobless Claims forecast at 415k vs. 424k previously. Also Weekly Crude inventories forecast at -1.7m vs. 0.6m previously.

The Euro (EUR) traded at fresh weekly highs in Europe before slumping on risk aversion due to the sharp fall in US stocks. May PMI Manufacturing fell further on revisions to 54.4 vs. 54.6 initially. EUR/CHF slump towards fresh all-time lows near 1.2000 on continued demand for the safe haven Swiss franc. Overall the EUR/USD traded with a low of 1.4306 and a high of 1.4460 before closing the day around 1.4350 in the New York session. Looking ahead, ECB President Trichet speaks

FOREX-Euro hovers near 4-week high on Greece hope; seen capped

The euro hit a four-week high at one point on Wednesday, supported by hopes for a fresh aid deal for Greece, but concerns that any deal would only be a temporary fix kept the currency's gains in check.

The dollar slipped to a fresh record low against the Swiss franc, as deteriorating U.S. economic data put pressure on the greenback, contrasting with upbeat readings of the Swiss manufacturing and retail sectors, which boosted the franc. The euro has risen more than 3 percent from a two-month low against the dollar struck on May 23, on expectations that Greece will put in place austerity measures and go ahead with plans to privatise assets to ensure aid flowing from the IMF. Whether Athens gets the fifth, 12 billion euro tranche of aid under its 110 billion euro EU/IMF bailout will depend on a meeting of senior EU finance officials underway in Vienna and also on a meeting of euro zone finance ministers to be held soon. "A deal for Greece would be a temporary stopgap that pushes the day of reckoning further down the road," said Lee Hardman, currency strategist at BTM-UFJ. "We think the euro is overvalued given the weak fundamentals in the euro zone and believe levels above $1.45 will be aggressively sold into," he added. The euro traded close to flat for the day around $1.4400 after rising to a four-week high of $1.4448 in early European trade. Dealers said a large option barrier at $1.4450 capped further gains. Near-term resistance looms at $1.4454, a 50 percent retracement of a slide from its early May peak above $1.4940 to a two-month trough of $1.3968 hit last week. Traders then reported offers at $1.4480/1.4500. The euro was dented after German newspaper Frankfurter Allgemeine Zeitung said it is now considered certain that the IMF will not pay its share of a fifth tranche of aid to Greece at the end of June. It did not cite any sources. The euro showed little reaction to soft euro zone PMI data which showed growth slowing in the manufacturing sector. Investors are more focused on a European Central Bank meeting next week when investors expect policymakers to signal a rate hike in July. "We are getting to a situation where markets are getting a feel that the European policymakers will get Greece back on track," said Audrey Childe-Freeman, EMEA head of currency strategy at JP Morgan Private Bank. "All the euro needs to gain further is a hawkish signal from (Jean-Claude) Trichet next week."

DOLLAR SLIPS, FRANC BUOYED

The dollar remained under pressure after a batch of weak U.S. data on Tuesday raised concerns that the U.S. economy's soft patch could become protracted. The key Institute for Supply Management manufacturing index is due to be released on Wednesday, along with a private sector ADP jobs survey ECONUS. Analysts say a weak manufacturing number, as forecast, could drive U.S. yields lower and weigh on the dollar. The dollar skidded over 1 percent to a record low against the Swiss franc of 0.8442 franc after a stronger-than-expected reading of Swiss PMI and bumper retail sales data triggered stop-loss buying of the Swiss currency. The euro also fell 1 percent to 1.2160 francs EURCHF=. "We suspect that the dollar could continue to underperform across the board in the current environment given that more evidence that the global recovery is losing momentum could corroborate market expectations of more Fed accommodation going forward," said Valentin Marinov, strategist at Citi.

ECB WATCH: German Economy, Euro CPI Data Point To July Rate Hike

European inflation slowed in May, giving the European Central Bank room to keep borrowing costs on hold next month. Inflation in the 17-nation euro region slowed to 2.7 percent from 2.8 percent in April, the European Union's statistics office in Luxembourg said today in an initial estimate. April's reading was the fastest since October 2008. Unemployment held at 9.9 percent in April from the previous month, a separate report showed.

ECB President Jean-Claude Trichet has signaled that the central bank may keep interest rates on hold in June after last month increasing the benchmark rate 25 basis points to 1.25 percent to fight price pressures. With the recovery losing momentum and governments cutting spending to plug budget gaps, the Organization for Economic Cooperation and Development said on May 25 that further rate increases "are not required immediately."

World markets cheer Greek, Japanese news

Investors in Europe cheer a report suggesting that Greece could receive additional aid from the EU and IMF. Stocks in Japan rise on signs of strength in manufacturing.

The advance in Europe came after a report in the Wall Street Journal said Germany may abandon its push for an early rescheduling of Greek debt, which could set the stage for another round of emergency funding for Athens. "Risk assets are rallying overnight after a WSJ story said that Germany is considering dropping its push for a rescheduling of Greek bonds in order to facilitate a new aid package for Greece," analysts at Deutsche Bank wrote in a note to investors. Concerns about the Greek economy, which is beset by massive public debt, have been festering for over a year. While the EU and the International Monetary Fund have already approved billions of dollars in loans for Greece, the nation continues to struggle. Germany and some other European powers had argued that additional aid for Greece should be tied to more austerity measures. But supporters of more aid say the Greek economy is too weak to handle further cutbacks. Stocks in Frankfurt were up over 2%, while London's FTSE 100 rose nearly 1% and the CAC 40 in Paris gained 1.4%.

Euro Rises On Optimism Over Greece

The euro climbed against most of its major peers, while Asian stocks and U.S. equity-index futures advanced amid speculation European nations will pledge more funds to repair Greece’s finances. Wheat sank the most in three weeks after Russia said it will allow grain shipments to resume.

Europe’s 17-nation currency strengthened 0.6 percent to $1.4369 and rose 0.5 percent to 116.13 yen as of 9:35 a.m. in Tokyo. The MSCI Asia Pacific Index climbed 0.6 percent, paring its steepest monthly slump in a year. Standard & Poor’s 500 Index futures added 0.4 percent. Wheat tumbled as much as 4.4 percent. Oil erased earlier losses, while copper snapped a four- day advance in New York.

EUR/USD Technical Outlook: Greece Debt Crisis Major Risk Concern

Euro under pressure, falling from Wellington highs of 1.4335, hitting lows 1.4272, weighed by concerns over Greece - with reports Greece missed all the conditions. Der Spiegel: The troika asserts in its report to be presented next week (this week) that Greece had missed all its agreed fiscal targets." The mission team from IMF, EC and ECB has found that Greece has missed all targets under its bailout plan, putting further funding for Greece at risks. On FX, EUR/USD at 1.4300-20 for now, bids at 1.4280-60, eye break of 1.4250/ 1.4200 again.