The greenback broadly maintained a sideways movement against most of its counterparts amidst thin trading. Also bear in mind that the US plans to end waivers for Iranian oil importers pushed the Loonie higher against USD. It should be noted that the US 10 year bond yield rose slightly again yesterday and may have provided a small boost for the USD once again. Also, US Existing home sales for March came out lower than expected, yet had little impact on the greenback. Analysts point out that there is a low number of financial releases and the markets may be focusing on the release of the US GDP growth rate for Q1. We could see some volatility around the USD today as the US new home sales figure for March is to be released, but also on the EUR as Eurozone’s consumer confidence is due out and especially the Aussie as the CPI rate for Q1 is due out tomorrow. USD/CAD dropped yesterday breaking below the 1.3360 (R1) support line (now turned to resistance), yet regained most of its losses during the Asian session today and is currently threatening once again the prementioned level. We could see the pair maintaining a sideways movement, yet the pair’s direction may prove to be dependent on the course of oil prices. Should the pair find fresh buying orders along its path today, we could see it breaking the 1.3360 (R1) resistance line and aim for the 1.3425 (R2) resistance level. On the other hand if the pair comes under the selling interest of the market, we could see it aiming if not breaking the 1.3290 (S1) support line.
GBP in tight range ahead of further Brexit developments
With the Easter holiday’s being over, Brexit developments seem to be in the cards for the GBP which has maintained a tight range in the past days against the USD. UK senior officials seem to believe that the only realistic chance for the UK parliament to pass a deal for Brexit would be with Labor party’s support. Talks between Conservatives and Labour are to resume today according to media, as Parliament members are to return to London. The main issue seems to remain whether the UK will remain in a customs union with the EU, an idea which is key for Labour, yet the PM had rejected as a bad deal a number of times in the past. Meanwhile reports are reeling in about activists and MPs from the Conservative Party which are calling for Theresa May to resign. Discontent in the Tory party has grown, especially after the extension of Article 50 to October 31st. Should there be headlines reeling in about Brexit, we could see volatility rising for the GBP. Cable remained in a tight range movement, teasing the 1.2970 (S1) support line. We expect the pair to remain sensitive to any new Brexit headlines and should there be negative developments, we could see the pound weakening, hence the pair dropping. Should the bears dictate the pair’s direction, we could see cable, breaking the 1.2970 (S1) support line and aiming of the 1.2875 (S2) support barrier. On the flip side, should the bulls take over we could see the pair aiming if not breaking the 1.3070 (R1) resistance line.
Other economic highlights, today and early tomorrow
Today during the American session we get Canada’s wholesale sales growth rate for February, the US new home sales figure for March and Eurozone’s preliminary consumer confidence indicator for April. Tomorrow during the Asian session, we get Australia’s CPI rate for Q1.
GBP/USD H4
Support: 1.2970 (S1), 1.2875 (S2), 1.2800 (S3)
Resistance: 1.3070 (R1), 1.3175 (R2), 1.3265 (R3)
USD/CAD H4
Support: 1.3290 (S1), 1.3235 (S2), 1.3175 (S3)
Resistance: 1.3360 (R1), 1.3425 (R2), 1.3510 (R3)
