US Durable Goods for February on deck

Summary

• USDCAD: Dollar/CAD is meandering in the low 1.33s as May crude oil prices continue their march higher to $62 this morning.  Key trend-line support at 1.3300 level held late yesterday after the Bank of Canada’s Stephen Poloz said the economic outlook continues to warrant an interest rate below the neutral range, however the broad risk-on mood from yesterday’s positive China PMI and US ISM numbers continues today and this is helping oil prices and CAD to rally yet again.  Up next are the US Durable Goods Orders for February, and traders are expecting -1.8% MoM.  We think a close below the 1.3300 level this week risks unraveling the uptrend we've witnessed in the market since the beginning of March.

• EURUSD: Euro/dollar continues this morning after yesterday’s stronger than expected US ISM print spurred demand for dollars and saw chart support in the 1.1220-30s give way.  Dollar/yuan has drifted above trend-line resistance in the 6.7230s today (Sunday’s opening levels), which is mildly EURUSD negative.  What is more, over 1blnEUR in options expire at the 1.1200 strike this morning.  We think EURUSD might attempt a bounce today after the 10amET options cut passes.

• GBPUSD: Sterling is trading back in the red this morning after UK lawmakers couldn’t agree to a majority on any of the four indicative votes held in parliament yesterday.  More here.  This saw GBPUSD gap lower at the start of Asian trade last night, and since then three attempts have been made to regain the lower bound of this chart gap (1.3070s) and all three attempts have failed.  This is now inviting the sellers back into the market we feel as the NY session gets underway today.  The UK reported its March Construction PMI this morning and the numbers missed expectations (49.7 vs 49.8).  Chart support today comes in at 1.3010-30.  Resistance is 1.3075, then 1.3125.

• AUDUSD: The Australian dollar is trading all the way back down into Friday’s range this morning after the Reserve Bank of Australia reiterated its neutral stance on the economic outlook and lowered its 2020 inflation expectations when announcing a hold on interest rates last night.  The market teased the fund shorts with a false break above trend-line resistance in the 0.7110s, but then immediately fell swiftly to trend-line support in the 0.7070s.  The selling continued in early European trade today, but some buyers have since stepped in at the next support level in the 0.7060s.  Over 1blnAUD in options expire at the 0.7100 strike this morning, and we think this could act a magnet for prices today should the US Durable Goods numbers not surprise to the upside.  Australia reports its February Retail Sales and Trade Balance figures tonight at 8:30pmET.  

• USDJPY: There’s very little going in USDJPY today, as traders continue to hug trend-line resistance in the 111.30s.  The S&P futures are extending yesterday’s gains but the US 10yr yield is backing up a touch this morning.  Over 2blnUSD in options expire between the 111.00 and 111.20 strikes this morning, which will likely keep the market subdued before 10amET.

Tune in @EBCTradeDesk for more real-time market coverage.

Market Analysis Charts

USD/CAD Daily Chart

USD/CAD Hourly Chart

May Crude Oil Daily Chart

EUR/USD Daily Chart

EUR/USD Hourly Chart

USD/CNH Daily Chart

GBP/USD Daily Chart

GBP/USD Hourly Chart

EUR/GBP Daily Chart

AUD/USD Daily Chart

AUD/USD Hourly Chart

May Copper Daily Chart

USD/JPY Daily Chart

USD/JPY Hourly Chart

June S&P 500 Daily

Charts: TWS Workspace

About the Author

Erik Bregar - Director, FX Trading

Erik works with corporations and institutions to help them better navigate the currency markets. His desk provides fast, transparent, and low cost trade execution; up to the minute fundamental and technical market analysis; custom strategy development; and post-trade services -- all in an effort to add value to your firm’s bottom line. Erik has been trading currencies professionally and independently for more than 12 years. Prior to leading the trading desk at EBC, Erik was in charge of managing the foreign exchange risk for one of Canada’s largest independent broker-dealers.

Interested in creating a custom foreign exchange trading plan? Contact Us or call CXI's trading desk directly at 1-833-572-8933.