The EU Morning Report - Euro Under Pressure Ahead of FOMC Statement - 30 July 2014


Currencies

  • The euro (EUR) continues its bearish trend against the US dollar (USD). The pair crashed yesterday towards 1.3409, while reaching a new 8-month low. The single currency is under pressure as US ADP Non-Farm Employment Change and FOMC Statement is coming ahead today.
  • The US dollar (USD) climbed to 102.07 against the Japanese yen (JPY) as the US CB Consumer Confidence data was better than expected at 90.9. After last week’s US Unemployment claims, where data was at the lowest for the last three years, the dollar strengthened while the FOMC Statement will be announced today.

Equities

  • US equities fell yesterday as the President of the US, Barack Obama, announced new sanctions against Russia while he warned Russia for their actions against Ukraine. The US 500 (SPI) fell to 1964, the US 30 (DOW) went to 16858 and the US Tech (NDQ) to 3956.

Commodities

  • WTI Crude (OIL) fell to 101.40 USD per barrel before supply data, as a Kansas refinery shut down, one of the most important refineries in the US, increased demand concerns.

Mover & Shaker with forex options

  • Gold (XAU) dropped yesterday near a one week low at 1299as the US economy recovers faster despite increased tension in Ukraine and Gaza.
  • Option traders may consider constructing a Long Straddle on the XAUUSD and gain if the pair moves in either direction, while the risk is limited to the premium paid.
  • A Long Straddle can be constructed by buying an at the money Put and an at the money Call.

Written by Demetris Constantinou
Currency Strategist at easy-forex®