U.S. failed to see much growth as the Producer Price Index came out dead flat and was even negative when food and energy are removed. The numbers show that the economy is falling short of Fed target rate of 2% annual inflation which could spike more taper talk. Crude oil has been range bound and gold has seen a slight recovery but both could see significant moves once the Fed's true stance on we tapering is revealed.
The EUR/USD dropped further against the dollar even on a day when it
should have rallied. The flash GDP came in at .3% growth which officially ends
Europe's longest recession in decades. The problem Europe still faces is high
unemployment which, like we have seen in the U.S., can lead to an agonizingly
slow recovery. (see EUR/USD below)
The USD/CHF continued to rally, enhancing our gains despite the fact
that the Swiss ZEW report showed increased confidence in the Swiss business
outlook for the next six months by institutional investors. Though the rally
doesn't allow us to tighten our stop loss we can't complain about the gains.
(see USD/CHF below)
The USD/CAD bounced around before closing slightly lower. We are
watching for a bounce off the trend line or a rally to past resistance and
currently there is more bearish pressure so we are watching for a support bounce
however it needs to occur soon because the bearishness momentum is beginning to
wane. (see USD/CAD below)