FX News - May 9 2014: USD Gains VS Majors

FX Strategy Articles > FX Trading Tips

The greenback is currently gaining strength, dragging down majors that are trading against it. First off is the AUD/USD, which slid down after making a huge run yesterday due to positive economic data from Australia and China. The story was different today, however, as China released disappointing Consumer Price Index (CPI) and Producer Price Index (PPI) data in April. Its CPI rose only by 1.8% compared to the previous year, which was lower than the expected 2.0%. Meanwhile, it contracted by 0.3% in the previous month, beating expectations of a drop by just 0.1%. Then finally, its PPI came out at -2.0%, which was lower than the expected -1.8% drop. The news dragged down the AUD/USD pair just above the 0.9350, and dropped by as much as 20 pips in today’s trading. It opened the Asian session at 0.9368 and slid after the release of the Chinese PPI and CPI data. It is currently trading at 0.9362, with initial resistance seen at 0.9425, followed by 0.9449. Meanwhile, initial support is at 0.9346, followed by 0.9323.

As for the EUR/USD, the pair briefly attempted to reach for the 1.4000 area, but stopped at 1.3993 before making a sharp decline late in the European session. Aside from the greenback’s strength, the drop was also due to ECB President Mario Draghi’s statement yesterday that hinted that inflation in the EU is still too low, while the value of the euro is too high, and that the ECB may act on these next month. The EUR/USD pair bottomed out at 1.3850 after this. In today’s Asian session, the pair has so far traded within a very narrow range between the 1.3830 and 1.3845 areas. It is currently trading at 1.3839, with initial resistance seen at 1.3917, followed by 1.3952. Meanwhile, initial support is at 1.3755, followed by 1.3721.

By FX Strategy Team, Published on 9th of May 2014
eTorro - Trading Starts Here

Start Trading Forex with up to $10,000

  • 100s Videos and FX Strategy articles
  • Advice from our FX traders
  • Practive free with using real time