Hawkish ECB Comments Boost Euro, AUD and CAD Struggle
| Action Insight Daily Report 4-25-23 |
Hawkish ECB Comments Boost Euro, AUD and CAD Struggle |
Euro is making broad gains in Asian session, fueled by hawkish comments from a top ECB official who suggested that the next rate hike could be a 50bps one. Euro's strength is also lifting the Swiss Franc, while Sterling remains firm but lags slightly behind. In contrast, Australian and Canadian dollars are underperforming, with the Aussie looking particularly vulnerable ahead of tomorrow's CPI report and facing additional pressure from selling in cross against New Zealand Dollar. Yen is also weak as markets anticipate BoJ will maintain its current policy stance unchanged at this week's meeting. Mild risk aversion in Asian stocks is providing slight support for the Japanese currency, but this may be short-lived. Dollar is mixed for now, alongside US stocks and bonds, but could be vulnerable to an extended selloff against European majors if key support levels are decisively broken. Technically, Gold appears to be attempting to find a bottom ahead of 38.2% retracement of 1804.48 to 2048.26 at 1955.13. Break of 2012.18 resistance could signal that correction from 2048.26 is complete, potentially leading to a strong rally through 2048.26 and towards record high of 2074.48. If realized, this move may coincide with break of 1.1075 in EUR/USD, regardless of which one occurs first. In Asia, at the time of writing, Nikkei is up 0.14%. Hong Kong HSI is down -1.62%. China Shanghai SSE is down -0.35%. Singapore Strait Times is down -0.80%. Japan 10-year JGB yield is up 0.0117 at 0.484. Overnight, DOW rose 0.20%. S&P 500 rose 0.09%. NASDAQ dropped -0.29%. 10-year yield dropped -0.055 to 3.515. |
EUR/USD Daily Outlook Daily Pivots: (S1) 1.0992; (P) 1.1021; (R1) 1.1076; More... Immediate focus is now on 1.1075 resistance in EUR/USD as rebound extends today. Decisive break there will resume larger up trend from 0.9534 to 1.1273 fibonacci level. Break there will target 61.8% projection of 0.9534 to 1.1032 from 1.0515 at 1.1441. On the downside, break of 1.0995 minor support will now indicate that corrective pattern from 1.1075 is extending with one more falling leg before completion. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:50 | JPY | Corporate Service Price Index Y/Y Mar | 1.60% | 1.60% | 1.80% | 1.70% | | 06:00 | CHF | Trade Balance (CHF) Mar | 4.20B | 3.31B | | 06:00 | GBP | Public Sector Net Borrowing (GBP) Mar | 12.2B | 15.9B | | 13:00 | USD | S&P/Case-Shiller Home Price Indices Y/Y Feb | 1.80% | 2.50% | | 13:00 | USD | Housing Price Index M/M Feb | -0.20% | 0.20% | | 14:00 | USD | Consumer Confidence Apr | 104.1 | 104.2 | | 14:00 | USD | New Home Sales Mar | 630K | 640K | | 22:45 | NZD | Trade Balance (NZD) Mar | -500M | -714M |
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