Article / 12 August 2016 at 11:49 GMT

Mid-session Europe: Listless dollar awaits retail spur

Saxo Markets


Foreign exchange

Dollar's rather listless performance in recent weeks — aside from the temporary boost from last Friday's NFP — could get a legup from today's retail sales print due within the hour. GBPUSD continues to struggle below the 1.30 handle meanwhile and fresh turn for USDJPY and EURUSD both look dependent on the strength or otherwise of the US data.


  • US  Advanced Retail Sales for July. M-o-m expected at 0.4%, prior 0.6% (1230 GMT) 

  • US Retail Sales Ex Auto July. M-o-m expected at 0.1%, prior 0.7%           (1230)

  • US Retail Sales Ex Au and gas July Expected at 0.3% vs Prior 0.7%         (1230) 

  • US PPI Final Demand for July. M-o-m 0.1% vs Prior 0.5%                         (1230) 

  • US University of Michigan Sentiment Preliminary for Aug 91.5, Prior 90     (1400)
Forex developments

In EURUSD the 55-day moving average has been a magnet so far pulling EURUSD back despite attempts to go mostly higher. Still looking at the tech resistances of late at 1.1190 area and then more importantly 1.1227 (the 100-day moving average). EURUSD has failed since the Brexit result to close on a weekly basis above 1.1166, so a close of week above that could keep the pressure on the upside for next week. Downside still has decent tech support at the 1.1081 area (200-day moving average). 

USDJPY still looks contained on the upside awaiting the Bank of Japan meeting in September. USDJPY moves very closely with gold (higher gold, lower USDJPY) and with gold running out of steam (see Commodities section) there is first technical support around the 10-day moving average at 101.71 area. The first decent tech resistance is around 102.5.

GBPUSD has closed continuously lower on a daily basis than opening levels since August 3, but the question is whether this justifies some retracement, but close of day and week below 1.30 and especially 1.29 adds to sentiment for a weaker GBP going forward. Take care of sharp rallies, especially if 1.3100 is taken out. 

AUDUSD we have liked higher from when it was around the 0.7600 area, but it is now testing the lows (0.7660) which we have been seeing as tech support area and which could open for moves towards the 0.7600 area. 0.7750 needs to be taken on upside for any new momentum. 

FX Options volatilities
USDJPY: Front-end volatilities are still under pressure… 1-month currently trades at 9.5%, down 3.25 vols from the high two weeks ago. The market continues to shift positions selling at the front-end, but buying back-end. 1-year seems to have found a stable level around 11%.
EURUSD: vols are trading a bit lower again today, as spot continues in a tight range. However we do have some US data coming out later today, which could provide a movement in spot, which vols so desperately need at the moment.

Fixed income



EuroStoxx 600 is flat on the day which is largely where it opened. Low volumes complete a positive week for global markets. Retail and industrials have marginally outperformed whilst materials fell on weak metal prices. Oil is holding onto recent gains aiding related stocks.
The Restaurant Group is up 14% after replacing CEO with ex Paddy Power head Andy McCue.
Maersk is up 4% after the company confirmed it is faring well in tough market conditions thanks to successful cost cutting.
K+S is down 2.25% after missing yesterday as potash prices tumble.
JC Penny reports its  numbers before the US open.

Paste equities text from email

Latest and still open trades on #SaxoStrats

The replay of our Morning Call can be found here

Join our Weekly OptionsLab on Wednesday  to find out more on covered call strategy.

Read more

Mid-session Europe is part of TradingFloor's stable of commentary running through from the US close, through Asia to the European session. Click below to keep abreast of all the developments as they happen.

 Will today's US retail report for July spur dollar on? Photo: iStock

— Edited by Martin O'Rourke

The Global sales Trading desk is a multi-asset team providing customised trading solutions
12 August
Martin O'Rourke Martin O'Rourke
A flat US retail sales report for July has left the dollar floundering against its major peers sending EURUSD above 1.12, USDJPY towards 101.0 and GBPUSD above 1.30


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail