US Dollar Keeps Advancing Against Major Peers, Equities Attractiveness Still in Place - 15.5.2013

The greenback held its upbeat tone advancing widely against its major counter parties coupled by US stocks returning back to gains, advancing to new record highs with US 10-Year bond yields climbing to almost two month high at 1.98% in yesterday session. The US dollar index rose above previous resistance at 83.39 and is currently trading at 83.79, holding a bullish bias in the intraday and approaching key resistance at 84.09, that level would most likely limit upside in the immediate term. US Small Business Index surged beating estimates to 92.1 in April from 89.5 in March underpinning further equities and the currency. The S&P 500 advanced by 1.01% to 1650.34, Dow Jones rose by 0.82% to 15215.25 and NASDAQ composite gain by 0.69%.

In Japan NIKKEI 225 managed to close above 15000, at 15096 soaring by 2.29% amid Yen getting weaker backing Japanese export industries and that would raise industrial and manufacturing production, improve trade balance and in the medium term reflect on GDP growth as well. The USDJPY increased above yesterday resistance at 102.12, limited in the short-term by 102.42 and at the time being is attempting new highs above 102.42.

The EURUSD dropped as low as 1.2891 this morning due to US dollar power over the most of its peers. Downtrend in the currency pair is well identified and technically we expect negative development in the medium-term as well as in the intraday. Prices are below the cloud of Ichimoku Kinko Hyo indicator, Tenkan Sen has already crossed below the Kijun Sen within the Cloud indicating a normal strength sell signal.

Finally focus today will be in Q1 GDP releases for Germany, France, Italy and eventually Eurozone, in addition jobs report for UK and BOE Inflation report, later on US PPI and Industrial Production are well anticipated.