The Canadian and Australian dollars rose 3.88% and 2.48% against the US dollar respectively in April. Traders target the upper trend-line level of $1.3800 for the Euro. Gold bounced back from its initial support of $670/oz to $678 on continued dollar weakness.
News and Events:
The Canadian and Australian dollars rose 3.88% and 2.48% against the US dollar respectively in April. Weaker than expected real GDP (slowest in four years) and upward trending Euro-zone blue chips keep the Euro at all time highs against the US dollar; the Euro rose 2.19% against the greenback last month. Rumor of a weak employment report at the end of this week provides ample support for the Euro and British Pound to move into record-high levels. Traders target the upper trend-line level of $1.3800 for the Euro. Should market sentiment hold that the Federal Reserve may cut rates at least once this year, traders see the Euro trading at $1.4000.
Gold bounced back from its initial support of $670/oz to $678 on continued dollar weakness. A break below $665 would signal a bearish bias in the market. For now, the metal is well-supported in the upward channel.
Today’s most interesting chart is USDCAD heading for a complete 100% Fibonacci retracement from a high of 1.1876 on February 8th of this year to a one-year low, and target, of 1.0930.
Today’s Key Issues (time in GMT):
06.30 AUD RBA Commodity Index SDR (YoY) (APR)
06.30 GBP HBOS Plc House Prices s.a. (MoM) (APR)
07.00 GBP HBOS Plc House Price (3Mths/Year) (APR)
08.30 GBP Purchasing Managers’ Index Manufacturing (Survey) (APR)
10.00 GBP CBI April Distributive Trades Report
11.45 USD ICSC-UBS (Apr 28)
12.30 CAD Industrial Product Price (MoM) (MAR)
12.30 CAD Raw Materials Price Index (MoM) (MAR)
12.55 USD Redbook (Apr 28)
14.00 USD Pending Home Sales (MoM) (MAR)
14.00 USD ISM Manufacturing Index (APR)
14.00 USD ISM Prices Paid (APR)
15.00 USD Bernanke Speaks on Free Trade in Butte, Montana
15.00 CAD BoC Governor Dodge speaks at House Standing Committee on Finance
21.00 USD ABC Consumer Confidence (Mar 29)
The Risk Today:
EurUsd targets 1.3700 as dollar weakness continues. Initial support remains at 1.3540; a daily close below this level could signal a deeper correction.
GbpUsd has held very well above 1.9965, its key support level. Resistance is seen at 2.0135. The pair is currently trading mid-way between those levels; what is important to note is a daily close below 1.9965 is very bearish.
UsdJpy is well supported above 119.00, trading inside the upwards channel. Resistance is seen at 120.00, but the pair could easily break that level while the Japanese are on holiday this week.
UsdChf has not made a new high recently confirming a bearish bias. Key resistance level remains at 1.2130 while the pair is supported at 1.2000. Look for a break below the support to confirm a continued down-trend.
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Resistance and Support:
By James Brandt - ACM Advanced Currency Markets, Geneva, Switzerland