Daily Analysis - Data on tap, US Durable Goods and New Home Sales.

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Economic News

USD

An important day for the greenback today, as traders look for a dash of positive news in order to push the USD a bit higher, after yesterday's negative figures. Existing home sales fell -8.4% to 6.12m in March, much weaker than the expectation of 6.45m and reached an 18 year low. Consumer Confidence also deteriorated further to 104.0, compared to the consensus of 105.0 causing the USD to weaken after data raised expectations the Federal Reserve may have to cut interest rates sometime this year.

As for today, at 13:30 GMT we should be expecting Durable Goods Orders which came in at 1.7% last month and is widely expected to rise to 2.6%. The core figure for the Durable Goods Order is even more positive as it is widely expected to come out of negative territory of -1.0% into the positive 1.1%.

After yesterday's Low existing home sales, all eyes will be on the new home sales release today at 15:00 GMT. The forecast for March's number is 890K. That's up almost 5% from February's 848K. Some analysts are already suggesting this may have been overly optimistic, just like the existing home sales estimate. It's worth noting that the two releases are quite different, however. New home sales require labor and material, while existing home sales don't. Existing home sales typically require a closed contract, while new sales may be based on simply signing a contract or accepting a deposit.

EUR

The European currencies grew stronger yesterday on the back of the low US data, despite a very low Euro-Zone Industrial Orders. The figure came out at a negative -0.7% while it was widely expected to come in at positive 0.9%.

As for today, the German IFO is expected to be released at 9:00GMT. The consensus is that it will come in unchanged from last month's 107.7, and despite moderate expectation will probably cause some price movement as it is considered to be an important indicator for the European market.

The UK Gross Domestic Product (GDP) will be released today at 9:30 GMT and is expected to weaken bit from last month's 0.7% into 0.6%. in addition to the IFO, and the flow of US data, we should expect all the major currencies to trade with a large price movement range today.

JPY

The Japanese Trade Balance was released overnight and came in very strong at 1.63T, which is a big climb from last month's 0.98T. Despite the strong figure we did not see sharp price movement on JPY pegged currencies.

There will be plenty of Japanese related news on Friday; most is expected to be relatively positive for the JPY, and still all are expected to generate no change in the JPY weakening trend.

We are moving into Golden Week, which is a period that most Japanese people take off for holidays. Over the past 10 years, there has been a positive rally for the USD/JPY on 6 out 10 times. The remaining 4 years there has been a tie between a negative rally and an unchanged status.


Technical News

EUR/USD

The pair is steadily approaching the all time high of 1.3666, which is a very strong resistance. The daily charts are bullish, but the hourlies are highly overbought. a break through the all time high resistance will spur an additional rise.

GBP/USD

After a short rebound, the pair is moving up again, and the 4 hour chart indicates that there is plenty of steam in the new up trend. Daily studies support the notion with a moderate bullish bias.

USD/JPY

The channel pattern on the daily chart has not yet been breached. The pair is now floating at 118.30 which is at the bottom level of the channel. If a break through the 118.10 will occur, then a further move down is expected. If a breach will not occur, then a correction up is imminent.

USD/CHF

The very important support of 1.2000 was touched, but the pair was shy of breaching the level violently. The daily charts are bearish, and the hourlies are oversold. Selling a failure might be a preferable strategy for today.


The Wild Card

CAD/CHF

The pair touched the bottom level of a very distinct channel but did not break it. This indicated a clear rebound up, which allows Forex traders to get into the correction move which is expected to have a target price of 1.0770.