Action Insight Mid-Day Report 5-5-21

Canadian Dollar Higher With Commodity Currencies, Euro Weakens

Commodity currencies continue to trade as the stronger ones entering into US session. In particular, Canadian is helped by extended rally in oil prices. New Zealand Dollar continues to receive support from better than expected job data. Overall sentiments are positive with European stocks staging a rebound, while US futures point to recovery. Euro is currently the weakest one, followed by Swiss franc, and then Yen.

Technically, Canadian Dollar would be a focus in US session. In particular, EUR/CAD's breach of 1.4723 support suggests that larger decline is resuming. Further rally is expected as long as 1.4838 minor resistance holds. Next target is 61.8% projection of 1.5783 to 1.4723 from 1.5191 at 1.4536. Eyes will also be on whether USD/CAD would break through 1.2265 temporary low to resume down trend.

In Europe, currently, FTSE is up 1.28%. DAX is up 1.53%. CAC is up 1.01%. Germany 10-year yield is up 0.025 at -0.211. Earlier in Asia, Hong Kong HSI dropped -0.49%. Singapore Strait Times dropped -0.80%. Japan and China were on holiday.

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EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1988; (P) 1.2026; (R1) 1.2054; More....

EUR/USD's pull back from 1.2149 continues today but outlook is unchanged. We'd still expect strong support from 38.2% retracement of 1.1703 to 1.2149 at 1.1979 to complete the pull back from 1.2149. On the upside, 1.2075 minor resistance will turn bias back to the upside for 1.2149 resistance. Break there will resume the rise from 1.1703 to 1.2242/2348 resistance zone. However, firm break of 1.1979 will bring deeper fall to 61.8% retracement at 1.1873.

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Economic Calendar

GMT	Ccy	Events	Actual	Forecast	Previous	Revised
22:30	AUD	AiG Performance of Construction Index Apr	59.1	61.8
22:45	NZD	Employment Change Q1	0.60%	0.30%	0.60%
22:45	NZD	Unemployment Rate Q1	4.70%	4.90%	4.90%
22:45	NZD	Labour Cost Index Q/Q Q1	0.40%	0.30%	0.50%
01:30	AUD	Building Permits M/M Mar	17.40%	3.00%	21.60%	20.10%
06:30	CHF	CPI M/M Apr	0.20%	0.40%	0.30%
06:30	CHF	CPI Y/Y Apr	0.30%	-0.20%	-0.20%
07:45	EUR	Italy Services PMI Apr	47.3	50	48.6
07:50	EUR	France Services PMI Apr F	50.3	50.4	50.4
07:55	EUR	Germany Services PMI Apr F	49.9	50.1	50.1
08:00	EUR	Eurozone Services PMI Apr F	50.5	50.3	50.3
09:00	EUR	Eurozone PPI M/M Mar	1.10%	0.90%	0.50%
09:00	EUR	Eurozone PPI Y/Y Mar	4.30%	4.00%	1.50%
12:15	USD	ADP Employment Change Apr	742K	808K	517K	565K
13:45	USD	Services PMI Apr F	63.1	63.1
14:00	USD	ISM Services PMI Apr	64.3	63.7
14:30	USD	Crude Oil Inventories	-1.9M	0.1M