FX News Today
- Asian stock markets rallied following the bounce on Wall Street yesterday that was fueled by seemingly conciliatory signals on the trade front and comments from Fed Chairman Powell
- Fed Chair Powell said the Fed will “act appropriately” signaling that the Central Bank is open to rate cuts if necessary.
- China’s Services PMI came in much weaker than anticipated at 52.7, down from 54.5 in the previous month.
- World Bank cut global growth forecast to just 2.6% from 2.9%, the weakest since the financial crisis, citing trade tensions and risks .
- The WTI future meanwhile is trading at just USD 52.94 per barrel.
- Markets are positioning for a very dovish signal from the ECB tomorrow, amid the multitude of geopolitical risks and weak PMI and inflation data this week.
- Today’s calendar has Services PMIs for the Eurozone and the UK as well as Eurozone retail sales and PPI readings.
Charts of the Day
Technician’s Corner
- USDCAD – H4- remains heavy on the session, bottoming at 1.3372 following the Powell comments, though since remaining in a decline, retesting the 3-month Support at 1.3356-1.3375, after breaking the significant 50-day MA. The close yesterday below the latter could be taken as a bearish USDCAD sign,with the next Support at 200-day EMA and April’s low at 1.3273.
- XAUUSD – H1 – boosted ahead of London open, spiking above 1334.00, just a dollar away from 3-month highs of $1,346.70. The contract had been bid up since late last week on severe risk-off conditions, with safe-haven flows seeing gold prices rising from lows under $1,274.00 last Thursday. Bigger picture, talk of Fed rate cuts limit downside potential for now. Next Resistance at February’s highs.
Main Macro Events Today
- ADP Employment Change (USD, GMT 12:15) – The April ADP Employment report should reveal a 183k gain for the month, after a 275k April gain.
- ISM Non-Manufacturing PMI (USD, GMT 14:00) – The ISM-NMI index is expected to edge up to 55.7 in April from a 19-month low of 56.1 in March, versus a 13-year high of 60.8 in September.
Support and Resistance levels
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Andria Pichidi
Market Analyst
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