SUMMARY

  • The Swiss National Bank lowered interest rates by 25 basis points, surprising the market.
  • Yesterday, the USDJPY rose +0.52%, managing to position itself near the 159 level. The currency is currently sideways at the 158.94 level. Traders are paying attention to the intervention of the Bank of Japan.
  • Canada’s new home price index rose +0.2% month-over-month, indicating an increase in demand. USDCAD closed yesterday correcting for the sixth consecutive day, this time -0.13%.
  • USDSGD’s third attempt to break above the 1.3500 resistance. However, there was a lack of buying volume, which resulted in a -0.08% retracement. At the moment, the currency is trading at 1.3533.

 

Main events:

  • UK retail sales
  • Statements by Bundesbank President Nagel
  • French manufacturing and services PMI
  • German manufacturing and services PMI
  • Euro zone manufacturing and services PMI
  • UK manufacturing and services PMI
  • Eurogroup meeting
  • Canadian retail sales
  • U.S. manufacturing and services PMI
  • Fed monetary policy report

EURUSD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$539
  • Example: 100 pips change in EURUSD price = USD1,000 potential PL.
  • Support 1: 1.0712
  • Support 2: 1.0707
  • Resistance 1: 1.0720
  • Resistance 2: 1.0723

Fundamental Analysis

  • The Swiss National Bank lowered interest rates by 25 basis points, surprising the market. Rates remained at 1.25% per annum. For its part, the Bank of England maintained rates at 5.25% per annum. In the United States, new jobless claims came in at 238,000, below the 235,000 expected.
  • The EURUSD closed yesterday’s trading day down -0.39%. Currently, the currency is up +0.15% and trades at 1.0716. The currency is just below resistance at 1.07191, where more buying volume is needed to continue its advance towards the 1.0760 level. The RSI is at 48.58, in the neutral zone, indicating that the rebound trend could continue. The moving averages point to a massive sell-off.
  • Traders are eagerly awaiting the manufacturing and services PMI series in Europe and the US, which are important indicators to gauge market demand.

USDJPY

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$499
  • Example: 100 pips change in USDJPY price = USD1,000 potential PL.
  • Support 1: 158,85
  • Support 2: 158,81
  • Resistance 1: 158,94
  • Resistance 2: 159,01

Fundamental Analysis

  • Yesterday, the USDJPY rose +0.52%, managing to position itself near the 159 level. At the moment, the currency is sideways above the 158.94 level. Traders are watching for intervention from the Bank of Japan, which could come soon or until the currency reaches the 160 level.
  • Japan’s core CPI came in at 2.5%, down one basis point from 2.6% in the previous report. On the other hand, Japan’s service sector PMI came in at 49.8, very close to the economic expansion zone.
  • Net speculative positions in the Yen are expected at -138.6K contracts, indicating that traders have started to enlist short positions to take profits from this week’s rally.
  • The currency continues to move higher with the ground clear. The RSI is at 64.99, neutral, but near the overbought zone.

USDCAD

Specifications

  • Leverage: 200
  • Units: 100,000
  • Margin requirement: USD$686
  • Example: 100 pips change in USDCAD price = USD1,000 potential PL.
  • Support 1: 1.3678
  • Support 2: 1.3676
  • Resistance 1: 1.3683
  • Resistance 2: 1.3686

Fundamental Analysis

  • Canada’s new home price index rose +0.2% month-over-month, indicating increased demand. The USDCAD closed yesterday correcting for the sixth consecutive day, this time with -0.13%. The currency is currently down -0.06% and is trading at 1.3678.
  • The price of the currency is at an ideal support for buyers. If the price bounces from the current level to the 1.3720 area, it will be a quick gain of +0.37%. The RSI is at 33.57, very close to the oversold zone, which also confirms the possible bounce from support.
  • Analysts are projecting the price of the S&P500 at 6,000 points by the end of the year. This would certainly boost the TSX.
  • Canada has increased tariffs on Chinese electric vehicles, joining the US and EU trade campaign.

SOURCES

  • Thomson Reuters
  • Market watch
  • Bloomberg
  • Tradingview

 

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