USD "May Day, May Day!"

KEY DATA RELEASES TODAY (BST) :

09:30 GBP Net Lending to Individuals m/m 2.6B 2.5B
09:30 GBP Manufacturing PMI 54.6 54.4
15:00 USD ISM Manufacturing PMI 52.1 51.5
15:00 USD Revised UoM Consumer Sentiment 96.1 95.9

OVERNIGHT:

Trading is likely to be thin with participation reduced for May Day holidays in Europe today and the UK on Monday, lowered participation may give some short term relief to the USD decline, as USD bulls will start to look towards seasonal support for the reserve currency.

Overnight the USDJPY has maintained the bid that emerged during the NY session yesterday after printing an 118.47 low we now trade 119.75 as solid real money bids helped support the lower end of the range. Likely we see action get a little sticky around the 120 handle again as there is decent sized options at this level due to expire at today’s NY cut, with sops building above the 120 level, a run of the stops could inject some upward momentum for a run back to test offers at April highs.

EURUSD has been quiet overnight as we continue to consolidate this weeks gains, likely we see some position adjustment heading into the close with traders reluctant to take to much risk home over the weekend especially with the potential for further Greek headlines over the weekend with Mondays holidays in the UK we could witness some nasty gaps. 1.12 should act as the magnet today with more than a yards worth of options due to expire at this level during the NY session.

GBPUSD has made a profit taking pullback from the 1.55 handle trading back to 1.53 bulls will be looking for this level to hold as they make another assault on the 1.55 offers with eyes on the 1.5550 pivotal peak where decent size stops are reported. As referenced caution is advised as we head into next weeks General Election as seasonally this period has been volatile, especially factoring the close nature of the race at present

PRICE ACTION OVERVIEW:

EUR: While 1.1050 supports expect test of 1.1350
GBP: Pivotal 1.55 test underway expect test of offers above 1.5550, below 1.53 refocuses bears
JPY: While 118.60/80 contains downside target 121.00 en route to retest of year to date highs, only below 118.30 concerns bullish view
CAD: 120 test underway failure here opens pivotal 118
AUD: While .8050 holds potential for medium term down trend resumption

KEY TRADES: