Money continued flowing into the USD yesterday as the US policymakers promised more aid to support small businesses to counter the impact of coronavirus pandemic. As can be seen from the relative strength chart above, the Australian dollar has been the weakest against the USD while the CAD has been holding its ground better than the others. Note that in this 15 min. chart some of the currency pairs are inverted to make them all comparable against each other. French, German, UK and US Purchasing Managers Index values are due for publication today so be ready to trade the potential volatility. By reading further you agree with our disclaimer at the bottom of this page and acknowledge that we do not provide investment advice.

The most dramatic swings have taken place in Cable. After a rally higher to 1.2863 resistance GBPUSD continued down and is now trading near yesterday’s session lows. We predicted couple of days ago that the 1.2760 support would be broken and yesterday the price closed below this level. This was in line with our predictions that were based on uncertainty factors such as no-deal Brexit and the rising number of Covid-19 cases. The nearest key resistance is at 1.2760 while the 1.2617 – 1.2693 is a technical confluence area. As Cable is trending lower and the 1.2760 resistance is so near, it’s more likely to move to the lower end of this range. Here’s the link to GBPUSD Price Action Analysis video from yesterday.

US Dollar Index didn’t create the higher low we said to look for (Video link here) but instead charged higher breaking resistance levels. EURUSD dropped below key support levels and USDJPY hit our target at 105. More volatility is expected today as French, German, UK and US Purchasing Managers Index values are revealed.

In yesterday’s Price Action Analysis video we gave 105.17 as the USDJPY target. Market hit our target today.

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Recent macroeconomic data releases

  • Canadian ADP Non-Farm Employment Change, -205K
  • US Philly Fed Manufacturing Index, 15 (15 expected)
  • US Unemployment Claims, 860K (825K expected)
  • UK Retail Sales, 0.8% (0.8% expected)
  • Canadian Core Retails Sales, -0.4% (0.5% expected)
  • US CB Leading Index, 1.2% (1.3% expected)
  • Preliminary UoM Consumer Sentiment, 78.9% (75 expected)

Macroeconomic data releases today and tomorrow

  • New Zealand Official Cash Rate, 0.25%, (0.25% expected)
  • RBNZ Rate Statement
  • French Flash Services PMI, 52.2 expected
  • French Flash Manufacturing PMI, 50.6 expected
  • German Flash Manufacturing PMI, 52.0 expected
  • German Flash Services PMI, 53.0 expected
  • EU Flash Manufacturing PMI, 51.5 expected
  • EU Flash Services PMI, 51.0 expected
  • UK Flash Manufacturing PMI, 54.3 expected
  • UK Flash Services PMI, 57.0 expected
  • UK Flash Manufacturing PMI, 52.5 expected
  • US Flash Services PMI, 54.5 expected
  • US Crude Oil Inventories, -2.5M expected
  • SNB Monetary Policy Assessment
  • SNB Policy Rate, -0.75% expected
  • US Unemployment Claims, 845K
  • Fed Chair Powell Testifies
  • US Treasury Sec Mnuchin Speaks

You may access the times and dates in the economic calendar here.

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Janne Muta
Chief Market Analyst
TIOmarkets.com

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Janne Muta
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