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American Home Sales in Growth Pace

A guest post written by DAR Wong

Currency Market Observations – 26 June 2017

Fundamental Outlook

The U.S. current deficits widens on quarterly comparison but home sales maintains growth pace. Germany keeps the manufacturing in steady pace while services shrinks. U.K. still maintains good momentum ahead of BREXIT with net borrowing reduced among public sector.

The U.S. current deficits expanded USD117 billion in Q1 and worse than revised USD114 billion contraction in the quarter ended December. Existing home sales expanded 5.62 million in May and maintained in growth pace, after rose 5.56 million in April.

The American unemployment claims for the week ended 17 June was 241,000 and little changed from past weeks. Another separate report on new homes sales expanded 610,000 in May and higher than revised 593,000 in April.

Japan’s trade surplus rose JPY130 million in May and lower than revised JPY160 million in previous month. Manufacturing index expanded at 52.0 in June and lower than revised 53.1 in previous month.

German producer prices shrank 0.2 percent in May compared to 0.4 percent gains in April. Markit reports German manufacturing index rises to 59.3 in June and maintains good pace. Services index slides backward to 53.7 and worst in past 5 months.

U.K. public sector net borrowing was reduced in GBP6 billion in May compared to GBP8.7 billion in previous month. Industrial order expectation unexpectedly jumps to index 16 and almost 2 times the forecast in June.

Technical Forecast

USD/JPY tested the resistance at 111.60 area as we predicted last week. This week, we reckon the trend will be prone to slide and re-test 109.50 support. However, beware of the bulls that could charge above 112.00 levels that might climb higher to 113.50 for short-squeezing the sellers.

EUR/USD is still trapped within the range from 1.1100 – 1.1250 region in mixed sentiment. The trend needs to breaks beyond this range in either direction in order to lead a headway. There is no clue of predicting the direction though we observe the week-chart may favor the downtrend on more probability.

GBP/USD is trading in mixed sideways after it bounces off recently from 1.2600 bottoms. However, we expect strong resistance will emerge at 1.2800 area and might reverse the bulls again in near future. Risk control should be set at 1.2850 region for seller in case of unexpected rise.

Dar Wong

This post is contributed by OPF Guest Blogger, DAR Wong.

DAR Wong is a registered fund manager in Singapore with 26 years of global trading experiences. You may reach him at dar@pwforex.com

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DISCLAIMER: This post is written for general information only. The author, publisher and/or any third party involved in the distribution of this work assume no legal responsibilities and shall have no liability whatsoever for any direct or consequential losses, costs or expenses arising from the use of the information contained herein.

 






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