| DAILY FOREX ANALYSIS BY CMC MARKETS |
Dollar remains vulnerable as key psychological support levels approach.
May 16th - The dollar may have found some support though yesterday’s session as many looked to book profits off the recent decline but overnight against the Yen we’ve seen something of a reversion and with key economic data also due from elsewhere during the session, many will be looking to see if other major currencies are set to react in a similar manner as the day progresses. Critically, the Japanese consumer confidence index touched the break-even 50 level – the first time such a number has been seen since June 1990 - and unsurprisingly this has offered a degree of support for the Yen although with key inflation readings due from the UK and US, plus the ZEW surveys expected for both Germany and the Eurozone as a whole, further volatility has to be anticipated as the day progresses. The market now has some clear ideas about where it sees respective monetary policies going next - US rates to soon level off, Eurozone rates to jump possibly as quickly as next month and UK rates to start rising again at some point in the future – so assuming this latest spate of profit taking is now at an end, ultimately any data that underlines these points could easily prove sufficient to initiate another run of pressure on the greenback…
Tim Wilbraham and Enis Mehmet
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