Afternoon Forex Overview

Daily Forex Fundamentals | Written by Dukascopy Swiss FX Group | May 29 09 15:02 GMT |

The dollar is broadly lower Friday after a flurry of economic data from around the world bolstering hopes that the grinding global recession may be easing. Relatively positive economic data have been the catalyst in most cases for the concerted global move against the dollar, as Japan reported that its industrial production rose by 5.2% last month, the largest monthly rise since March 1953. In the U.K., the latest report from Nationwide estimated that house prices rose by 1.2% in April, raising hopes that the worst of the recession is over. Germany added to the positive mood with a 0.5% increase in its retail sales last month, helping to offset concerns about falling export demand. Overnight, the dollar sank to new year-to-date lows against the euro, pound sterling, and pro-cyclical currencies like the Australian and Canadian dollars as risk appetites revived smartly. Friday, the euro was at USD1.4107 from USD1.3945 late Thursday, while the dollar was at JPY95.67 from JPY96.96. The euro was at JPY134.94 from JPY135.19. The pound was at USD1.6145 from USD1.5935, while the dollar was at CHF1.0724 from CHF1.0852. Market expectation EURUSD ebbs lower again with cable and traded back under USD1.4100 briefly as bounce stalls shy of earlier high at USD1.4135 and supply noted there. Trader's cautions that risk may be that short-term accounts are now overly long the pair with others suggesting that medium to long-term accounts has not actively participated in the day's dollar sell-off. Do those slower-to-move accounts step up to the plate, or do the short-term players lighten up ahead of month end? Traders say stops a risk under USD1.4050/55 area of old highs. Pound is back above USD1.6100 and meets resistance around USD1.6120 (50% USD1.6173/1.6066). Above here and further resistance is placed at USD1.6130/35 ahead of USD1.6150. EURGBP pushes above resistance at stg0.8750, as sterling pares earlier gains, but seen meeting sell interest around stg0.8760. Above here and stronger resistance noted between stg0.8770/80. USDJPY slipping further for trade near JPY95.40 area now as earlier reported demand interest around JPY95.50 gets taken out and as the yen starts to benefit more from broad dollar weakness. Minor support eyed at JPY95.24 area of Thursday lows. Dukascopy Swiss FX Group Legal disclaimer and risk disclosure This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.