EURAUD Under Pressure for Lack of Positive Catalyst
While the euro has been hammered by bitter dissension lately between members in regards to the rescue package, there could be light at the end of the tunnel. As countries started to timidly step out of their lockdowns, ECB officials have commented that we might have seen the bottom, even though the recovery may last for a while.
Traders will focus on this week’s ECB press conference, and should the central bank reaffirm its optimism, the single currency may start to nudge higher. 1.7100, near the 30-day moving average, is a key resistance area, failure to break out would reinforce the bearish sentiment.
GBPJPY Grinds Lower on Weak UK Data
The pound sterling remains under pressure as negative numbers stack up. The UK has become the hardest-hit country by the pandemic and the economy registered a steep decline of 5.8% in March. The April figure is widely expected to be worse as the country spent the whole month on lockdown.
As long as markets jitter over the risk of a protracted recession, safe-haven currencies like the Japanese yen are likely to keep the high ground.
The pair is inching towards 128.00 as the pound struggles across the board. 133.00 is the immediate resistance level on the upside if there is enough buying interest.
USDCHF in Tight Range as Investors Stay Cautious
The US dollar held strong as uncertainty remains despite gradual ease of lockdowns across the globe. The greenback seems to be the cautious bet as concerns over a lengthy recession and even a second wave of contagion grow.
The fact that the Fed is holding back on negative rates provides further support to the dollar. Nevertheless, the question investors are asking is whether the Fed has enough ammunition to sustain its massive stimulus.
USDCHF is trading in a narrowing range between 0.9600 and 0.9800. A breakout on either side would dictate the direction for the coming weeks.
AUDCAD Hovers Below Key Resistance
The Canadian dollar has found some support from the latest rally in the oil market. China’s industrial production climbed 3.9% in April and gave a boost to commodity markets. Both commodity-sensitive Aussie and loonie are likely to benefit from improved sentiment.
Now, price action has reached crossroads after the pair recovered to last December’s high. The upcoming Canadian price data may tip the balance.
A bullish breakout above 0.9150 could trigger an extended rally in the Aussie’s favor. On the downside, the psychological price tag of 0.9000 is a key support in case of a reversal.