China, Japan, and UK closed for National holidays
Eurozone data underpins EURUSD
US dollar opens with small losses, except against CAD and JPY
FX at a Glance
FX Recap and Outlook
China and Japan are on holiday until Thursday. The UK just took today off. FX trading volumes were greatly reduced, and the major currencies stayed in narrow ranges until the start of the NY session.
European equity indexes are trading flat to modestly higher, and S&P futures are higher as well. Gold squeezed out a slight gain while WTI oil inched lower.
EURUSD in narrowly in Asia then popped from 1.2014 to 1.2055 in Europe due to strong economic data. German March Retail Sales surged 7.7% m/m, compared to 2.7% m/m in February. The final reading of Eurozone April Manufacturing PMI was 62.9, a tad slower than expected but still better than the March reading of 62.5. ECB policymaker Luis De Guindos said the ECB could consider phasing out stimulus once the economy picks up pace and 70% of adults are vaccinated. The short term EURUSD outlook is bearish while prices are below 1.2080, with a move below 1.1980 targeting 1.1940.
GBPUSD has a negative outlook following the break of the April uptrend line at 1.3890, with a move below 1.3870 extending losses to 1.3840. There are reports that the UK will resume non-essential travel beginning May 17. UK markets were closed for the Early May Bank holiday.
USDJPY climbed to 109.69 from 109.26. Traders are looking for further gains to 110.80 while prices are above 108.80. Trading was quiet due to Japan’s Golden Week holidays.
AUDUSD and NZDUSD inched higher compared to Friday’s close. AUDUSD rose from 0.7708 to 0.7732, supported by a modestly soft US dollar vs the majors, and by better than expected AIG Manufacturing PMI, which was 61.7 from 59.9 in March. Traders are looking ahead to the RBA monetary policy meeting tomorrow and quarterly economic forecasts on Friday.
USDCAD climbed from its overnight low of 1.2271 to 1.2317, consolidating losses following last weeks breach of support at 1.2450. USDCAD gains are capped by steady to firm oil prices and the recent hawkish bias to the Bank of Canada outlook.
USDCAD Technical Outlook
The intraday USDCAD technicals are unchanged. They are bearish below 1.2320, looking for a move below 1.2250 to extend losses to 1.1940. A break above 1.2330 targets 1.2380. For Today, USDCAD support is 1.2250 and 1.2210. Resistance is at 1.2310 and 1.2350. Today’s Range 1.2270-1.2330
Chart: USDCAD daily
Source: Saxo Bank
FX open, high, low, previous close
Source: Saxo Bank