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By XE Market Analysis April 26, 2017 7:06 am
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    XE Market Analysis: North America - Apr 26, 2017

    The yen rebounded from fresh lows as the "Macron-trade" paused. USD-JPY was back to near net unchanged at 111.16 bid as of the late London AM session, having earlier clocked a 16-day peak at 111.63. EUR-JPY ebbed to around 121.20 after earlier trading in six-week high territory near 122.00. The moves came as the global stock market rally sputtered, with European bourses mostly in decline and U.S equity index futures slightly in the red after the stellar rally in regular Wall Street trade yesterday. Hope for Trump to deliver on tax cuts may curtail the correction, and we continue to recommend buying into USD-JPY weakness. EUR-USD retreated to around 1.0880-90 after earlier edging out a five-month peak at 1.0950.

    [EUR, USD]
    EUR-USD retreated to around 1.0880-90 after earlier edging out a five-month peak at 1.0950. The dip reflected a correction in the rally seen after Macron's success at the weekend's election. A Reuters article, citing unnamed sources, had also reported that ECB members are readying to shift their policy stance at its June policy meeting, which we think will likely be a removal of its easing bias. News of this report sparked euro buying yesterday, but shouldn't have been too surprising on reflection. We still look for EUR-USD to re-establish itself back above 1.1000. Trend support is at 1.0878-80, and resistance at 1.1010-12.

    [USD, JPY]
    The yen rebounded from fresh lows as the "Macron-trade" to a pause. USD-JPY was back to near net unchanged at 111.16 bid as of the late London AM session, having earlier clocked a 16-day peak at 111.63. EUR-JPY ebbed to around 121.20 after earlier trading in six-week high territory near 122.00. The moves came as the global stock market rally sputtered, with European bourses mostly in decline and U.S equity index futures slightly in the red after the stellar rally in regular Wall Street trade yesterday. Hope for Trump to deliver on tax cuts may curtail the correction, and we recommend buying into USD-JPY weakness. USD-JPY trend support is at 110.70-76, resistance at 111.70.

    [GBP, USD]
    Sterling has continued to trade mixed, today managing a rebound versus the euro as the common currency corrects some as the "Macron rally" abates, and trading softer versus the yen and dollar. Cable has settled around 1.2820 after earlier logging a low at 1.2804, remaining a net 0.2% down on the day. The six-month peak at 1.2906, seen last Tuesday after British PM May called a snap election for June, looks out of reach now amid signs that the UK consumer sector is stagnating as rising prices and falling real incomes rein-in bullish sentiment. A warning from ECB member Nowotny yesterday that Brexit challenges in the two-year time frame are being underestimated may have also struck a chord, with investors presently in limbo, waiting on the EU to clarify its negotiation stance at the upcoming summit, in addition the June-8 general election in the UK. May will today be meeting with European Commission president Juncker and EU's chief Brexit negotiator Barnier.

    [USD, CHF]
    EUR-CHF has remained buoyant on the back of a generally strong euro. The cross clocked a four-month high at 1.0869, extending gains seen in the wake of the French election. We expect the cross to hold in a higher range. EUR-CHF support is at 1.0824-25, and resistance is at 1.0880-82.

    [USD, CAD]
    USD-CAD logged a new high for the year at 1.3626 on news that Trump is wanting go slap a 20% tariff on Canadian imports of lumber. This came with the sharp drop in oil prices over the last week already having put the Canadian dollar under pressure. USD-CAD is up from a six-week low at 1.3223, which was seen on April 13. Trend support is at 1.3510-12, and resistance at 1.3658-60.

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