Risk Appetite Hurt By Middle Tensions; Dow And Nikkei Drop

Published 06/25/2014, 03:13 AM
Updated 03/09/2019, 08:30 AM
EUR/USD
-
GBP/USD
-
USD/JPY
-
AUD/USD
-
US500
-
DJI
-
JP225
-

Risk appetite was hurt by escalating tensions in the Middle East. The Dow 30 closed sharply lower by losing -119.13 pts at 16818.13 while the S&P 500 dropped -12.63 points to close at 1949.98. Asian equities followed with Nikkei 225 falling -70 pts and is trading around 15000 handle at the time of writing. The forex markets are relatively steady though. European majors continued to stay in established range against dollar. The EUR/USD is stuck between 1.3502 and 1.3676, USD/CHF stays in 0.8907 and 0.9036, the GBP/USD staying in range of 1.6918 and 7062. The USD/JPY is also hovering in tight range around 102. More notable move was seen in the AUD/USD, which took out 0.9374 minor support which signals near term weakness.

In US, New York Fed Dudley said the US "can get the unemployment rate considerably lower and still not have an inflation problem." And, it's "reasonable" for the markets to expect Fed to start raising the short term interest rates around mid 2015. San Francisco Fed Williams said that US is "about two years off from being an economy that's at full employment, back to normal, and inflation back to normal levels." And he is "optimistic" about the mid term economic outlook. Philadelphia Fed Plosser said he had "growing concerns that we may have to adjust our communications in the not-too-distant future". And, Plosser thought Fed's forward guidance "may be too passive".

On the data front, Japan corporate service price index rose 3.6% yoy in May versus expectation of 3.2% yoy. German Gfk consumer consumer sentiment, Swiss UBS consumption indicator and UK CBI reported sales will be released in European session. US durable goods orders are expected to show -0.1% contraction in May and ex-transport orders are expected to rise 0.3%. Q1 GDP final reading will also be released and is expected to revise further down to -1.7%.

Dollar index continued to engage in consolidative trading below 81.02 and outlook is unchanged. Overall, further rise is still in favor with 79.88 support intact. It should be noted again that 78.72 represents an important long term fibonacci support. And the index could have bottomed around there. Above 81.02 will target 81.48 resistance first. break will confirm reversal and target 84.75. However, below 79.88 will turn focus back to this 78.72 support level.
US Dollar Index Chart

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.