Forex Market News
The Loonie strengthened against the greenback after Poloz’s statement to parliament and “stops” were triggered under 1.10. Whilst the Canadians are 75% reliant on the US for their export market, they have seen a reduced demand in recent times. Poloz was positive however and with a growing US economy the Loonie should benefit. Australia and NZ, the other commodity currencies, have outperformed the Loonie and are at the other end of the spectrum, overdone.
“The Canadian currency will weaken 3.1 percent to C$1.13 by year-end, according to the median estimate of more than 40 strategists surveyed by Bloomberg. New Zealand’s dollar, known as the kiwi, will fall 2.9 percent to 83 U.S. cents, while the Aussie will drop 5 percent to 88 cents, separate surveys suggest.” http://www.bloomberg.com/news/2014-04-29/loonie-gets-u-s-flu-missing-out-on-commodity-gains-currencies.html
Across the Pacific, the Yen rolled out of safe haven flow as risk appetites grew with stock markets bounding higher and Ukraine contagion seen unlikely. Over in Europe the Germans disappointed with inflation weaker. Inflation is under the ECB mandate and Draghi’s biggest headache. And remember that the “ECB President Mario Draghi has signalled he’ll use unprecedented measures from negative interest rates to quantitative easing if needed to avert the risk of deflation in the 18-nation currency bloc. Inflation in the region was 0.5 percent in March, the lowest rate in more than four years and well below the ECB’s goal of just under 2 percent.”
Tonight we have the big one, well early morning let’s say, with the FOMC release and statement. Aunty Janet, aka Alan Greenspan Service Pack 3, aka AGSP3, aka US Federal Reserve Chairwoman Janet Yellen is not due to speak of the release but will talk tomorrow night at some boring function that I’d hate to attend, would rather be tied to an Aussie meat ants nest, naked, covered in ETA BBQ sauce.
DATA HIGHLIGHTS TODAY – NZ biz confidence. Japan MONETARY POLICY. EU CPI. Candian GDP. US GDP. US FOMC.
AUDUSD – Found minor support level and also 50 fib (9227) and 200ema. I am fundamentally not bullish yet but technically if this bar today is a HH/HL then we would be looking at a fairly good buy signal.
EURUSD – Stuck in a 100pip range and I repeat, wait for shorting opportunities. They will come as Draghi is getting testy with the data coming out of Europe.
GBPUSD – An inside buyer bar as ol’ Blighty continue to punch out strong data. Last nights’ GDP was slightly under expectations but still good stuff. Unfortunately it is in the middle of nowhere for me (and you) to trade it. Can’t yet sell it nor can you buy it.
NZDUSD – Found some support overnight off 8525, same as Aussie though. Technically looks great, fundamentally not so much.
USDCAD – Big wake up call for those Loonie bears. Over extended bar but I still see it range bound in the future. Trade this in the smaller timeframes or against other pairs, such as the Yen, Aussie, Kiwi or Euro.
USDJPY – Managed to break a little higher with HHHL. Expect it to test recent highs of 104.12 before attacking 105.50’s.
GOLD – A LHLL test bar as geopolitical tensions ease and rise. They ease in Ukraine, rise in Libya. It’s a rough ol’ world we live in. We are a lucky lot in this quarter of the hemisphere.