FX News - May 7 2014: USD Weakness Persists Ahead of Yellen Speech

FX Strategy Articles > FX Trading Tips

The market is currently on a wait and see mode ahead of Fed Chairwoman Janet Yellen’s speech later today (2PM, GMT). If Ms Yellen repeats the dovish message she delivered in the past, then it is likely that the greenback’s weakness will persist after that. Thus, the EUR/USD pair, for example, will be expected to continue with its run and maintain the 1.3900 level for the time being.

Earlier today, there have been a series of data releases made by Germany, Switzerland, and France, which practically were a mixed bag. Switzerland’s unemployment rate stayed at 3.2%, while Germany’s factory orders in March fell by 2.8% over the previous month. Meanwhile, France showed poor numbers in its industrial output, which fell by 0.7% instead of improving by 0.2% as per the market’s expectations. In addition, its trade balance fell by €4.9 billion instead of just €4.0 billion.

All these, however, did little to affect the movement of the EUR/USD pair in today’s trading session. It opened today at 1.3929, before struggling throughout the day, eventually bottoming out at 1.3911. It is currently making a recovery and is trading at 1.3919. Initial resistance for the pair is at 1.3980, followed by 1.4015. Meanwhile, initial support is at 1.3899, followed by 1.3864.

The greenback also struggled against the yen in today’s trading as the USD/JPY pair continued to trade below the 102.00 area. It opened today’s Asian session at 101.69 and topped out at 101.75. It went downhill from there, however, as it hit the 101.43 floor twice today. It is currently trading at 101.57, with initial resistance seen at 101.95, followed by 102.21. Meanwhile, initial support is at 101.24, followed by 100.98.

By FX Strategy Team, Published on 7th of May 2014
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