The EU Morning Report - Corn near 4-year low as good weather in the US increases supply - 22 July 2014


Currencies

  • The euro (EUR) dropped yesterday down to 1.3512 against the US dollar (USD). The single currency has formed its resistance at 1.3545 and support at 1.3500 while edging lower.
  • The US dollar (USD) rose from 101.19 towards 101.50 against the Japanese yen (JPY). The monthly US CPI and the US Existing Home Sales are coming ahead with expectations of at 0.2% and 4.98M respectively.

Equities

  • Asian equities advanced earlier today as investors believe that the tensions in Ukraine won’t hurt the global economic growth. The Hong Kong 40 (HSX) recorded 7 months high at 23608, the Japan 225 (NKI) went up to 15407, China 50 (CNX) to 6790 and India 50 (IND) towards 7743.

Commodities

  • Corn (CRN) is currently trading near its four year low at 363 USD cents per bushel as the supply increases due to favourable weather in the US.

Mover & Shaker with FX Options

  • Gold (XAU) remains volatile and is now trading near 1307 US dollars an ounce, as investors are weighting the tensions in Gaza and Ukraine against the strong US dollar.

  • Option traders may consider constructing a Back Spread Strategy with Puts on the XAUUSD and gain if the pair moves lower, while the risk is limited to the premium paid.
  • A Back Spread Strategy with Puts can be constructed by selling an at the money Put while buying an out of the money Put at double amount.
Written by Demetris Constantinou
Currency strategist at easy-forex