Last big trading day today. There is always trading but don’t expect too much to happen till Monday and most probably Tuesday.
EURUSD – It has held the 1.38 level and has pushed up and broke through 1.3850 but hasn’t found any more strength above that. We believe euro is overbought and are looking to go short. We are not rulling out it going all the way up to 1.40 though that is why we are looking to sell the euro against other pairs like the sterling. See more on that bellow.
GBPUSD – 1.6791 -1.6838 range. We are looking to buy a dip to 1.679 and a break of 1.6850 should see fresh momentum buying. EURGBP is retracing with EUR strength but we are still bearish on that pair. We took our profit just above 0.82 with it being just 20 points above our target and will look to re-enter a short position at about 0.8260. The next support would come in at 0.82 a0.81577
USDJPY – it had a bit of a reversal since yesterday’s close with the dollar on the back foot across the board. Profit taking has been noted in the wake of the Easter weekend which was always on the cards.It has gone back through 102 and is now trading above it. It is range play day today and for our longer term position we will look to buy the correction at about 101.2.
In the Cabinet Office Monthly Economic Report for April, the Japanese government downgraded its assessment of the economy for the first time since November 2012 as consumers ratchet back spending after the recent jump in the nation’s sales tax rate.
However, the downgrade is largely attributed to the pull back effect following the sales tax hike to 8% from 5% – “The Japanese economy is on a moderate recovery trend,” the report said while at the same time noting “some weak movements” in response to the last-minute surge in demand before the sales tax went up.
USDJPY showed little reaction to the report and continue to meander around the 102 level, which should not be too surprisingly given that the downgrade was already rumoured by the Japanese newspaper Nikkei earlier this week.
USDCAD – the BOC came out with a predictably dovish tone in their statement whilst leaving rates unchanged. It was evident that Poloz was trying to verbally engineer a weaker CAD to aid investment and exports and in the short term he succeeded with USDCAD printing a high up at 1.1035 before drifting lower toward 1.10 where we currently trade. Not expecting much from it today being Easter weekend. The range is 1.095 and 1.104.
AUDUSD – range trading between 0.9300 and 0.94. We are looking to get in at the bottom of the range and see it go up to 0.9450 looking for anything between 100 and 150 points.
That is it from us for this week. Have a good Easter weekend and good luck trading if you are still doing it during the break. I shall be back with you on Tuesday.