EURUSD, Daily
The pair found support from the 1.0804 intraday support and rallied a little bit higher on Friday before failing to penetrate the 1.0900 resistance. Now that we have the FOMC meeting coming this week it might well be that market participants aren’t prepared to make strong directional commitments before they’ve seen the Fed press release. Therefore getting through this resistance might be a bit difficult before this release. The 50 day SMA and upper Bollinger Bands are right above the resistance level and Stochastic Oscillator is overbought with the nearest daily support level currently at 1.0667. At the time of writing EURUSD is trading at 1.0828 support level. There isn’t much in terms of economic releases today. This could lead to subdued trading conditions in USD pairs.
Currency Pairs, Grouped Performance (% Change)
USD is up against the majors but there are no single big movers in the USD pairs this morning. The same applies to most of the currency pairs with AUDCHF being an exception with 50 basis points move. After rallying strongly GBP has been slightly weaker against all the others but AUD. Sterling has been benefitting from the recent growth in the UK economy and now that the Fed has turned dovish, it is attracting money. After last week’s BoE minutes, market participants expect the BoE to be one of the first banks to raise rates, while most central banks are looking to drive their currencies lower with loose monetary policies and quantitative easing. US data is expected to be soft in the second quarter as well, which suggests that the will be no Fed rate hikes in the June meeting. Market participants look forward to the Fed’s mid-week press release for further clues on how the Fed sees the US economy developing. It is likely that the tune will stay carefully dovish but there probably will be no further clarity for the timing of the timing of the rate hikes.
Main Macro Events Today
- German April import price inflation rose to -1.4% y/y: The previous figure was -3.0% y/y, weaker EUR is pushing prices higher.
- US Markit Services PMI (April)
- RBA’s Governor Glenn Stevens Speech
- Japan Large retailers’ Sales (March)
- Japan Retail Trade (y/y) (March)
Click here to access the full HotForex Economic calendar.
Janne Muta
Chief Market Analyst
HotForex
Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.