Forex Afternoon Wrap 27th April

Key Notes:

• German Import prices m/m 1% vs. 0.5%
• CBI industrial order expectations 1 vs. 4

Later:

• US flash services PMI

Lack of fundamentals keep trading light on Monday

The currency markets opened the week on a quiet note with not much of economic data on the tap. The markets were therefore trading off the broad themes with the Greenback trading mixed. The Aussie was relatively stronger early into Monday’s trading session as the AUDUSD attempted another rally to break the previous highs above 0.78. However, into the US trading session, the pair looks to be losing steam and could potentially test lower to 0.77. The Kiwi dollar continued its weak run from last week’s RBNZ verbal talk down. The currency was trading near 0.76 levels and looks poised to test back to the lows at 0.75 into the US trading session.

The Japanese Yen was trading mixed but managed some volatility as Fitch, the ratings agency downgraded Japan’s investment rating status by one notch to A+ but maintained a stable outlook. The Yen initially weakened on the news causing a spike but soon settled back into its mixed trading. USDJPY was seen trading above 119.2 and could see some further upside gains in the short term.

The European trading session saw the release of German import prices which rise 1% for the month, beating estimates of 0.5% but slowed from 1.4% from the previous month. The Euro however shrugged off the news trading within a tight range near the highs of 1.089 and 1.082.

The British Pound which saw a strong rally last week eased from its highs near 1.52 and was trading near 1.512. A continued weakness could potentially see the Cable dip lower with the major support at 1.495 waiting for be tested.

The US Dollar Index was trading at 97.30 after the index attempted to break above 98.2 but failed. We could potentially expect to see further weakness in the US Dollar index with the next support at 96.33. A break below this support could see the US Dollar drop down to the next major support at 94.10, which could potentially stall the correction for the short term.

The US Dollar’s weakness was felt across the board with Crude Oil trading near new highs of 57.05 while Gold futures managed to reverse their losses their 1180 lows and looks poised for a test back to 1200. A break above 1200 could potentially turn Gold bullish in the short term.

Later in the evening, the US Flash services PMI is due and there are no other economic data for the rest of the day.