Today's Currency Movers

EURUSD, Daily

EURUSD traded pretty much according to what I anticipated. I wrote yesterday: This is the fourth time the market moves this high and towards the 1.1035 resistance after creating a higher low on April 13th. This lowers the probabilities of price reacting lower from the same resistance level. Therefore we should be careful and not take it granted that the market will turn lower from the same levels again. It could rally higher before reacting lower again.

The dollar plunged through the morning session, after much weaker Q1 GDP data dented sentiment, doubly so ahead of an FOMC announcement that was already expected to lean on the dovish side. EUR-USD opened just under 1.1000, and made its way to 1.1188 highs ahead of the Fed. The pair eased back slightly ahead of the statement release, before falling back on the Fed’s downgraded economic outlook, and on general profit taking. The high of 1.1188 in EURUSD was the low of 94.75 in DXY. This low coincided with a previous low and a support level from March 18th. At the time of writing EURUSD is moving above yesterday’s high and approaching the next resistance.


Currency Pairs, Grouped Performance (% Change)

The JPY strength was the theme earlier this morning. Weakest pairs throughout the morning were AUDJPY, CADJPY and NZDJPY. AUDJPY hit a resistance and is now reacting lower from it CADJPY is also reacting lower from a resistance but does not look as weak as AUDJPY. NZDJPY is trading at 50 SMA and close to lower Bollinger Bands and pivotal support. Now at the time of publishing this report it is the AUD weakness that dominates the picture while EUR has been rising against the majors with EURAUD up by over 1.5%.

Main Macro Events Today

• NZ Official Cash Rate: OCR remained unchanged at 3.5%. According to governor Wheeler it would be appropriate to lower the OCR if demand weakens, and wage and price-setting outcomes settle at levels lower than is consistent with the inflation target.
• BoJ Monetary Policy Statement: BoJ left policy unchanged and maintained the Y80 tln annual increase in the monetary base.
• German Retail Sales m/m: March retail sales unexpectedly declined 2.3% m/m, against expectations for a rebound from the dip in February, which was revised to -0.1% m/m from -0.5% m/m reported initially.
• German Unemployment Change: Stabilising growth is helping labour markets across the Eurozone. German jobless numbers dropped 8K (median -10K) in April, which left the seasonally adjusted unemployment rate unchanged at 6.4%, as expected. The German economy is strengthening and jobless rates are at very low levels, which together with the pick up in demand will ensure sizeable wage gains this year.
• Eurozone CPI y/y: No big change expected. Previous figure -0.1%.
• Canadian GDP: a fall of 0.1% in February is likely after the 0.1% drop in January. Forecast risk is to the downside given the hefty declines seen across manufacturing and drop in wholesale. Energy remains the wildcard. The BoC expects flat GDP in Q1, so an as-expected report would roughly back that outlook and have no impact on the policy projection.US Unemployment claims: Initial claims data should reveal a 290k headline, down from 295k last week and 294k in the week of April 11th. We saw the usual seasonal volatility around the Easter Holiday and claims in April look poised to average a higher 292k from 285k in March and 206k in February.