Market Roundup
- US Apr Existing Home Sales -3.3% (consensus 0.8%, previous 6.5%)
- US Philly Fed erratic, employment & prices paid lower vs April, new orders up
- US Initial Jobless Claims w/e 274k, (consensus 271k, previous 264k), continuing claims at 15-yr lows
- Brazil IBC-BR Econ Activity Mar -1.07%, (consensus -0.5%, previous 0.36%)
- South Africa 2M repo rate stays flat at 5.75 % (consensus 5.75 %, previous 5.75 %)
- Mexico Mar IGAE econ activity yy increase to 2.7 % (consensus 2.40 %, previous 2.27 %)
- ECB's Draghi says growth is too low everywhere
- Fed'S Fischer says European crisis has proved ECB has the power to implement effective monetary policy in the euro zone
- Fischer says euro zone's survival is virtually assured even though crisis has not ended
- BOE's Weale nearly all of expected boost to UK growth from lower oil still to come, lower oil may have bigger than expected impact on 2016 UK inflation
- WTI clears key downtrend line; USD Index faltering below 100-DMA
- (1930 ET/ 2330 GMT) Japan Reuters Tankan DI (previous May 12)
- (2300 ET/ 0300 GMT) Japan Bank of Japan holds Monetary Policy statement/ Kuroda Presser
FX Recap
USD/JPY: Greenback is still suffering the effects of the neutral tone from the FOMC minutes released on Wed. Adding to the weakness US calendar disappointed market expectations, Philly Fed and Markit plus Existing Home Sales have all missed forecasts. USD/JPY is wobbling near 121.00, and focus remains on the BoJ meet Friday. Currently the pair is trading at 121.06, down 0.23% on the day. Supports lie at 120.58 (low May 20), 120.19 (Tenkan Sen) and 120.00 (Kijun Sen). Resistance aligns at 121.49 (high Mar 20) followed by 121.57 (high Mar 13) and finally 121.67 (high Mar 12). Option expiries for Friday 22 May: 120.00 (2.5BLN), 121.00 (1.2BLN), 122.00 (2.2BLN)
GBP/USD is having the biggest rise in two weeks. The pound spiked during the European session supported by economic data from the UK. During the American session cable stabilized near daily highs and consolidated the strong daily gains. GBP/USD peaked at 1.5700 but it found resistance and pulled back. It is currently trading at 1.5663, moving toward the level it had at the beginning of the week at 1.5735. Option expiries for Friday 22 May: 1.5650 (405M)
GBP/CHF: The pound rallied across the board and versus the Swiss franc reached post UK election highs, boosted by upbeat UK retail sales report. GBP/CHF broke above 1.4600 and jumped to 1.4678, hitting a fresh high for the month. The pound was able to consolidate above the key 1.4615 area. Resistances lie at 1.4675/80 (daily high), 1.4700 and 1.4770. While support now could be located at 1.4615, 1.4575 and 1.4515/20 (daily low).
USD/CAD: Recovery in oil prices helped Canadian dollar erase intraday losses versus the greenback. USD/CAD is in a phase of consolidation around the 1.2200 level. At time of writing, USD/CAD is trading at 1.2200, virtually unchanged on the day. Immediate supports are seen at 1.2167 (May 20 low), 1.2129 (May 19 low) and 1.2100 (psychological level). Resistances are at 1.2255 (May 20 high), 1.2300 (psychological level) and 1.2340 (100-day SMA). Option expiries for Friday 22 May: 1.2265 (790M)
EUR/USD rose to a high of 1.1180 supported by Eurozone data, but failed to sustain gains and pulled back despite weak US data. EUR/USD is trading at 1.117, almost unchanged on the day. Market attention turns to the US inflation figures due tomorrow. Immediate supports are seen at 1.1061 (May 20 low), 1.0990 and 1.0935 (50-day SMA). Resistances could be found at 1.1180/84 (daily high/20-day SMA), 1.1200 (psychological level) and 1.1245 (10-day SMA). Option expiries for Friday 22 May: 1.1000 (2BLN), 1.1050 (563M), 1.1100 (807M), 1.1200 (1.4BLN)
