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Market Wrap
Busy day today with mixed outcomes in Flash PMI data coming in from Europe, UK and the USA. We also received Canadian retails sales data along with crude oil inventories from the EIA.
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The German DAX traded lower into the London session close today and is down -1.62% for the last week. German Flash PMI for Manufacturing and Services came in higher than forecasted as further loosening of COVID-19 restrictions gave the German economy a boost.
There are still supply shortages but the lead times across a lot of producers is falling and a recovery in employment is accelerating.
Flash Germany PMI Composite Output Index at 60.4 (May: 56.2). 123-month high
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The EURUSD ends the London session flat for the day as the market weighs up the mixed PMI data from around Europe and the US dollar trades off its recent short squeeze highs.
The daily 200 exponential moving average was not tested on the highs of the day but could prove to be a formidable resistance level if the bears can take out the lows of a daily candle in the coming trading sessions.
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Canadian retail sales were disappointing coming in at -7.2% versus expected -4.4% for the Core reading and month on month sales were lower than expected at -5.7%, having been at 4.5% the previous month. Oil inventories from the Energy Information Administration (EIA)
Showed crude Inventory -7.6M Barrels vs -4.1M Expected, Cushing -1.8M, Gasoline -2.9M vs +1.3M Expected but Distillate +1.75M vs +248K Expected. There has been greater demand for distillates recently so a build in those inventories was unexpected. Energy prices were higher after the strong report and if OPEC+ keep new output levels at the agreed amounts ahead of the Iranian ‘The Joint Comprehensive Plan of Action’ (JCPOA) we should see a steady rise in Oil prices for the next month or so.
After the London close, I was notable that the WTI price had fallen by a $1 and USDCAD had returned to its opening prices. Retail trader sentiment remains high for the traders who are bullish the USDCAD and currently the daily 20 and 50 ema’s are acting as solid dynamic support.
Tomorrow a lot of the focus will be on what the Bank of England do, so I will be analysing the GBPUSD and EURGBP more. Currently the ActivTrader sentiment indicator is showing that 80% of the traders on the platform are bullish the EURGBP so it will be interesting to see if they get squeezed out of their position.
