Ranges Rule As Headline Risk Persists

KEY DATA RELEASES TODAY (BST) :

09:30 GBP MPC Official Bank Rate Votes 0-0-9 v 0-0-9
09:30 GBP MPC Asset Purchase Facility Votes 0-0-9 v 0-0-9
15:00 USD Existing Home Sales 5.04M v 4.88M
15:30 USD Crude Oil Inventories 2.7M v 1.3M

OVERNIGHT:

EURUSD weakened across the board and hit 1.0658 low, pressured by deepening concerns that Greece could default on its debt and eventually exit the Eurozone. German Zew current situation index in April printed at 70.2 against the forecast 56.5, while economic sentiment was 53.3 against the forecast 55.3. Interbank reports suggest participation in EUURSD trading has thinned as participants remain on alert regarding Greek headline risk.

GBPUSD continues to consolidate last weeks gains although it did pull back in unison with the EUR to trade a 1.4853 low before attempting another push higher, Current price action suggests GBP might have built up resilience to doubts about the result of the UK general election although as we get closer to outcome trading may become more volatile in the near term. Today’s focus will be the BoE meeting minutes due by today

USDJPY has traded up for two consecutive days as the Nikkei trades above 20,000.Japanese merchandise trade balance printed at ¥229.3B in March, which was far above the forecast of ¥50B, ended 48 months of trade deficits; imports (YoY) printed at -14.5%, below the expectation of -12.8%; while exports (YoY) met the forecast of 8.5%.

PRICE ACTION OVERVIEW:

EUR: 1.0620 key support for further corrective upside failure here suggest downside trend resumption targeting year to date lows
GBP: Below 1.4840 revives bearish bias
JPY: While 118.30 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: 123/24.50 former support now becomes key resistance
AUD: While .7860/80 contains upside anticipate third test of key .7550 failure here opens the bearish target of .72, above .7880 alleviates downside pressure

KEY TRADES: