UK Elections, NFP's Eyed

KEY DATA RELEASES TODAY (BST):

09:30 GBP Parliamentary Elections
13:30 USD Unemployment Claims 277K v 262K

OVERNIGHT:

EURUSD rallied to a two-month high of 1.1370, continuing to pull away from a 12-year trough of 1.0456 plumbed in March. Market believes the Euros resilience is mainly due to an swelling in Bund yields, which have jumped nearly 50 basis points in just a week as the European QE trade which was very crowded (Long Dax, Long Bund, Short Euro) has been somewhat unwound.

GBPUSD was given a small boost by a better-than-expected survey of purchasing managers in Britain’s dominant services sector in European session Sterling bid against USD after the miss in ADP but shed one percent against a broadly stronger euro, hitting a three-month low before the national elections today.

USDJPY tumbled to day low after an economic report showed that US private sector added fewer jobs than expected in April. Japan’s 10-year bond yield rose 7 bps, the biggest increase in three months. JPY crosses quiet, mostly bid, big players still on holiday, looks like we will head into the NFP’s mid range making it harder for players to position into the data so most will be in wait and see mode.

USDCAD weakened as crude prices surged to 2015 highs while the US dollar fell on soft economic data. Oil’s move appeared to overshadow any market reaction from an historic election in the oil-producing province of Alberta, in which the left-wing New Democrats won a crushing victory,ending the Progressive Conservatives’ 44-year hold on power.

PRICE ACTION OVERVIEW:

EUR: Testing 1.1350 offers as anticipated expect bids at a retest of 1.1250 intraday, only below 1.1150 concerns immediate bullish bias
GBP: While 1.5050 supports the advance expect a retest and break of 1.55 en route to 1.5560
JPY: Rejected at the 120 descending trendline, now mid range as price contracts to the apex of the triangle
CAD: Bids at 120 continue to support on a closing basis, while this level survives anticipate a retest of 123/24 from below
AUD: Offers at .8050 reject on the first attempt while .78 supports potential for another run at .8050