30/05/2014: Trading outlook ahead of the US session

Trading has been rather subdued throughout the morning of European trading on the final day of the month. Equity markets are trading mixed, while S&P 500 futures are pointing to a 2 point decline at the open having hit yet another all time high yesterday on the cash index. A slight miss for Spanish and Italian flash CPIs have held back the prospect of a Euro bounce today, whilst the early rebound for Sterling has pared back some of the move. As the dollar has clawed back some of its earlier weakness the gold price has also once again started to come under further weakness.

With little appetite to take a view ahead of the raft of economic data next week markets have been quiet. Subsequently, it looks as though traders will have to look for direction from this afternoon’s US data. Dollar traders will now be focusing on the personal consumption data which is due at 13:30BST with Personal Income expected to be +0.3, whilst the revision of the Michigan sentiment at 14:55BST is forecast to improve slightly to 82.5.

EUR/USD has failed to break above resistance at $1.3620 and this looks to be another chance to sell, whilst GBP/USD has hit resistance under $1.6760 and also looks to be a chance to sell. USD/JPY has rallied back to the resistance of the falling 55 hour moving average at 101.70 and once again this looks to be a chance to sell. Gold has been finding resistance at $1260 for a third straight day now and pressure continues to the downside.

Although the DAX has poked to a new all time high today there is still a distinct lack of conviction behind the move which has extended into a third straight day. This certainly does not bode well for the FTSE 100 which has been lagging the DAX and CAC, which following today’s decline is around 35 points still away from the recent 14 year high at 6895. I would not be backing for a breakout in this afternoon’s trading.

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