FX Market Wrap at the Wall Street close
The US Dollar was bearish against all of its major pairs on Wednesday. On the economic data front, the Mortgage Bankers Association's Mortgage Applications fell 3.3% for the week ending April 24th, from -0.3% in the week before. GDP dropped 4.8% in the first quarter advanced reading (expected -4.0%), from +2.1% in the fourth quarter third reading. The Federal Open Market Committee (FOMC) decided to hold the Federal Funds Target Rate at 0.25%, in line with the last meeting.
On Thursday, Personal Income for March is expected to fall 1.5% on month, from +0.6% in February. Personal Spending for March is expected to fall 5.0% on month, from +0.2% in February. Initial Jobless Claims for the week ending April 25th are expected to decline to 3,500K, from 4,427K in the prior week. Continuing Claims for the week ending April 18th are expected to increase to 19,476K, from 15,976K in the week before. Finally, Market News International's Chicago Business Barometer for April is expected to fall to 37.7 on month, from 47.8 in March.
The Euro was bullish against most of its major pairs with the exception of the NZD, AUD and CAD. In Europe, Rating agency Fitch downgraded Italy's rating to "BBB-" from "BBB+" with a stable outlook, saying "the downgrade reflects the significant impact of the global Covid-19 pandemic on Italy's economy and the sovereign's fiscal position." The European Commission has posted the Eurozone's April Economic Confidence Index at 67.0 (vs 74.7 expected). The European Central Bank has reported the Eurozone's M3 money supply in March at +7.5% (vs +5.5% on year expected). German CPI index was up by 0.3% in April in first reading vs +0.1% expected and +0.1% a month earlier. Inflation rate was 0.8% vs 1.4% in March.
The Australian dollar was bullish against all of its major pairs again.
Regarding major FX pairs,
• EUR/USD rose 54pips to 1.0874 the day's range was 1.0819 - 1.0886 compared to 1.0810 - 1.0888 the previous session.
• GBP/USD gained 40pips to 1.2466 the day's range was 1.2389 - 1.2486 compared to 1.2404 - 1.2518 the previous session.
• USD/JPY dropped 24pips to 106.63 the day's range was 106.36 - 106.90 compared to 106.56 - 107.34 the previous session.
• USD/CHF declined 2pip to 0.975 the day's range was 0.9713 - 0.9768 compared to 0.9721 - 0.9800 the previous session.
• AUD/USD jumped 53pips to 0.6544 the day's range was 0.6487 - 0.6552 compared to 0.6434 - 0.6514 the previous session.
• USD/CAD fell 108pips to 1.389 the day's range was 1.3878 - 1.4004 compared to 1.3936 - 1.4073 the previous session.
• The dollar index dropped 0.33pt to 99.535 the day's range was 99.465 - 99.885 compared to 99.450 - 100.209 the previous session.
FX pair in focus
The USD/CAD remains in focus after surpassing downside targets mentioned in yesterday's FX market wrap. Resistance can be seen around the 1.391 area as the pair remains capped by a declining trend line. Look for a test of key support at the 1.3855 level from April 14th on the decline. A break above 1.392 might signal a reversal to the upside.
Source: GAIN Capital, TradingView