Durable Goods and Consumer Confidence Boost Dollar

DailyFX

THE TAKEAWAY:USD Durable Goods Orders (MoM) (MAY) +3.6% versus +3.0% expected, from +3.6% (revised from +3.3%) > USD Consumer Confidence (JUN) 81.4 versus 75.1, from 74.3 (revised from 76.2)

Today was the largest economic data day this week for the USD, with the DailyFX Economic Calendar indicating no more “high” impact US events this week. The two events today both printed good numbers: US Durable Goods +3.6% versus +3.0% expected (Bloomberg News survey); US Consumer Confidence 81.4 versus 75.1 expected (Bloomberg News survey).

Global markets appear to be a bit calmer today although China’s liquidity crunch remains a point of worry. The Deputy Head of the PBOC’s Shanghai branch did say today that the liquidity risks were controllable however, which eased Chinese equities off of their lows. The implied volatility in the market, measured by the CBOE Volatility Index (VIX) calms to 18.63 (-7.36%) at the time of writing. Global equities – ex-Asia—are modestly stronger today: S&P +0.91%; Euro Stoxx +1.26%; Nikkei -0.72%; Hang Seng +0.21% at the time of writing. Turning to commodities, crude oil is higher today while base metals globally trade lower outside of the US: WTI +0.46%; Brent +0.59%; LME Copper -2.17%; COMEX Copper +1.92%; Shanghai Copper -0.86% at the time of writing. In FX, the Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) gains +18 (+0.16%) on the day to 10750 at the time of writing.

However bond prices continue to slide. 10YR US treasury yields climb +4.3bps (+1.69%) to 2.580% at the time of writing. Note that most of the selling off in treasuries occurred after the positive US data at 12:30 GMT and 14:00 GMT.

AUDUSD 15-minute Chart: June 25, 2013

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Durable_Goods_and_Consumer_Confidence_Boost_Dollar_body_Picture_4.png, Durable Goods and Consumer Confidence Boost Dollar

Charts Created using Marketscopeprepared by Kevin Jin

The AUDUSD is trading neutral on the day, remaining range bound between $0.9200 and .9300. The pair has remarkably failed to close below .9200 support or above .9300 resistance throughout the entire trading day. The pair moved bearishly towards .9200 during Asian hours amidst continuing tight Chinese liquidity. However, the pair did rebound by London Open and continued to trade mixed before New York Open. Following good US data (durable goods and consumer confidence), the AUDUSD did fall on the heels of a stronger USD.

GBPUSD 15-minute Chart: June 25, 2013

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Durable_Goods_and_Consumer_Confidence_Boost_Dollar_body_Picture_3.png, Durable Goods and Consumer Confidence Boost Dollar

Charts Created using Marketscopeprepared by Kevin Jin

The GBPUSD is trading slightly negative today, falling -22 pips (-0.14%) to $1.5411 at the time of writing. The cable hovered around the 1.5450 level for the majority of Asian and European trading before sliding downwards to 1.5400 after the positive US data. The pair tried to break below 1.5400 but the break was rejected, moving the GBPUSD about 10 pips above at the time of writing.

EURUSD 15-minute Chart: June 25, 2013

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Durable_Goods_and_Consumer_Confidence_Boost_Dollar_body_Picture_2.png, Durable Goods and Consumer Confidence Boost Dollar

Charts Created using Marketscopeprepared by Kevin Jin

The EURUSD is net -39 pips lower (-0.29%) to $1.3178 at the time of writing. After trying to break higher late in the Asian session, the EURUSD was ultimately stopped at the 1.3150 level. The pair consolidated throughout most of the European session but positive US data pushed the pair briskly lower below 1.3100. Taking a look at the D1 chart, today’s candlestick almost exactly mirrors yesterday’s candlestick in the opposite direction (at the time of writing); the highs and lows nearly match and the trading range is similar.

USDJPY 15-minute Chart: June 25, 2013

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Durable_Goods_and_Consumer_Confidence_Boost_Dollar_body_Picture_1.png, Durable Goods and Consumer Confidence Boost Dollar

Charts Created using Marketscopeprepared by Kevin Jin

The USDJPY is trading neutral on the day, moving in a 100 pip range between ¥97.00 and 98.00 – similar to the AUDUSD’s trading profile today. The pair moved lower in the later parts of the Asian session before rebounding at the 97.00 level shortly after London Open. The pair continued to move higher near 98.00 after positive US data, trading just shy of that 98.00 mark at the time of writing.

--- Written by Kevin Jin, DailyFX Research

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