Eurogroup meeting eyed, USD lower

Market Brief

Initial jobless claims figures rose for the third week in a row to 295K while the market was looking for 287K: new home sales figures for March were also due yesterday and came in at 481K verse 515K, prior read revised up by 4K to 543K. As a result the USD was on bid yesterday in New York before recovering in Tokyo.

The Nasdaq printed the highest close of its history at 5,056.06 (up 0.41% intraday) while the previous record from June 10, 2000 stands at 5,048.62; the S&P 500 edged up 0.24% and the Dow Jones appreciated 0.11%. However, US futures are mixed with S&P futures in negative territory, Nasdaq and Dow Jones are up by 0.82% and 0.20% respectively.

EUR/USD is lower this morning as it failed to break the 1.0825 resistance (Fib. 38.2% on Mar-Apr rally) for the fourth time in less than 2 weeks. On the downside, closest supports stand at 1.0685 and 1.0458 (Fib 61.8% and low from mid-March).

In Asia, equity returns are mixed. The Shanghai Composite declined by -1.80%, the Hang Seng edged down by -0.60% while the Nikkei lost -0.75%. On the other hand, Australian shares rose 1.40%, the S&P/ASX Index higher at 5,933.3. AUD/USD is treading water for the last few days and is stuck under the 0.7784 resistance (Fib 61.8% on Mar-Apr sell-off). If broken, one resistance lies at 0.7843 (highs from April 17 and 19), while on the downside the Aussie should find some support around 0.7736 (Fib 50%) and 0.7688 (multi low and Fib 38.2%).

In Europe, equity futures are broadly lower as the meeting of euro zone finance ministers takes place today in Riga. The pressure reached its peak on April 21 with the 5year Greek yield skyrocketing above 20% while the German one reached -0.165% on April 17. However we do not expect much from this meeting as several finance ministers already lowered their expectations for this meeting. The next key date for Greece if the payment of €200mn to the IMF on May 1, while on May 6 Greece has to find €1.4bn at its 26-week Bills auction.

EUR/CHF is slightly higher this morning after having erased most of its gains following the SNB's announcement about the tightening of the exemption rules. At the moment, you’ll need 1.0365 Swiss franc to buy 1 euro. USD/CHF failed to break the 0.9728 resistance (Fib 61.8% on Mar-April sell-off) and declined sharply in late London session. The dollar continued its fall in Asia and is currently getting closer to the psychological level of 0.95. If this support is broken, the following one stands at 0.9451 (low from February 26).

Today will be a quiet day as only a few economic releases are due. Traders will watch durable goods orders from the US. However, the focus will remain on the Eurogroup meeting in Riga today.