USD/CAD reacted strongly to last week's support when the pair briefly touched the support line at 1.3220 and then went to the upside. The gains, however, might turn out to be short-lived. After the initial impact, USD/CAD went to a high of 1.3342 and then the momentum disappeared.
The latest lower than expected US data that came out on Friday, the CPI and ARS, reflected in the price of the US dollar. USD/CAD is currently trading at 1.3297, down some 50 points until now.
The opening hours of today's session can be described as hours of low volatility and insignificant moves that could help traders and investors gain some insight about market sentiment and overall market conditions.
EUR/USD is trading slightly higher in today's early European hours. The pair is currently at 1.0635 as market participants are getting ready to return to the markets after a few days of rest and low volumes.
The speech by the UK Prime minister Theresa May focused on holding general elections on June 8. The news initially drove investors away from the Sterling but just a few minutes before the speech ended, the Sterling skyrocketed leaving all bears caught by surprise.
One of the most influenced pairs was the GBP/.CHF pair which reacted bearishly right at the resistance line at 1.2640. The pair reached a low of 1.2551, then spiked to a high above 1.2683.
Economic growth, according to Theresa May, has exceeded all expectations and the leaving of the EU would not be a disaster as expected by many people.
Other GBP pairs were also influenced by the speech. GBP/USD is now 1.2664. Overall, a very positive reaction in the Bullish camp of the UK currency.
USD/JPY has been trading to the downside ever since it reached its peak post-elections when Trump became president. The pair reached a high of 118.60 on Dec 16 and then slowly started to depreciate until recently when it made its lowest point at 108.11.
The pair is now 108.99 and it seems that the support level has successfully managed to hold the bears from destroying the trend. More important, however, is the fact the Yen has been depreciating against all of its peers.
The Yen is trading at support against the Australian dollar as well so we might expect a change in direction. The GBP/JPY pair is the only one that is going to the upside due to the unexpected announcement about the UK General Elections in June.
USD/CAD is trading to the upside this week as price reached a high of 1.3489. The pair seems to have gathered enough momentum to keep it going. The Canadian dollar has been weakening and this is the main reason the price is advancing.
On the other hand, the US dollar is also having a period of depreciation as it is losing points to its peers. USD/CAD reached the 200SMA last week at 1.3223 and is now getting closer to the double top at 1.3534. This would be a good time to enter short in the market.
If that level of resistance holds, first bear target is seen at 1.3240, which would be a retest of the 200SMA. Next target would be the support line at 1.3140. If the bulls turn out to be stronger, price will be heading to major bull zone at 1.3842.
For the first time in 5 months the Euro went as high as 1.0920. The pair reacted to news coming from the French election day where the French nation chose Macron as the first one to go to second round against Le Pen.
The different views of the candidates are what made the spike in the Euro Dollar so obvious. Macron is Pro-European and focused on close partnership with the European union, whereas Le Pen has the potential to create a Frexit, after the Brexit.
Macron boosted the European currency as well as European stocks. The Euro went as high as 1.0920 against its major competitor - the US dollar. Currently, trading price is gravitating towards 1.9865.
The Sterling is close to its 7-month high as the GBP/USD pair has been rallying on technicals and fundamentals combined. On the technical side, the pair registered a low of 1.1920 on Oct 7 and since then it has been trading in the wide range between 1.20 and 1.27.
The pair had a double bottom at 1.1980 on Jan 16, ever since then it's been swinging for the fences. Latest high was registered a few days ago on April 19 at 1.2902. Current market price is 1.2811 and it appears that the price has consolidated in the last week around 1.28-1.2850.
Main trend remains strongly bullish and if the bulls manage to go above the resistance line at 1.2950 we might see a renewed momentum to the upside.
On the other hand, bears might try and use this as an opportunity to push it lower to first bear target at 1.2730.
GBP/JPY has been trading to the upside for the past couple of weeks as price advanced from 135.57 to the latest high made yesterday at 143.01. The Sterling rallied on the news that the United Kingdom will be having General election on June 8.
Market participants favored the announcement made by the UK Prime minister Theresa May and the Sterling climbed up against all of its competitors.
Currently, the GBP/JPY pair is trading somewhat lower at 142.70 but momentum is still bullish and has the potential to bring the pair up to resistance at 144.00.
If that level is reached, bears may take action and try and bring it down to potential first target at 142.50. On the other hand, if bulls are able to keep the momentum going, the pair may go to a high of 145 as first target.
Gold has been declining for the past couple of weeks due to a strong technical boundary. The precious metal reached the level of $1,295, which comes just a few points above the resistance. Since then it started to depreciate with rapid pace to a low of $1,259.
Currently, Gold is trading at $1,264, some $30 lower than it's 6 month high made on April 17. The precious metal still needs the support of the bullish camp, moreover now when it's right at the 200SMA.
Weekly time-frame shows how strong the resistance really is. We see that the latest high came at the same resistance line that goes back to the all time high of $1,920. If we can get past $1,300 we might see a renewed positivism in the Gold market.
AUD/CAD met the resistance level at 1.0317 this morning before the European session opened. The pair immediately and gracefully retreated from the resistance zone and is now trading slightly below it at 1.0285.
Bears will try to take control over it now and push it further down. First potential target zone is eyed around 1.0250 which would be considered a prior pivot point if we can get a bounce off of it.
If that level does not hold, major bear target on the short-term is expected at 1.0100. This would be considered the potential bounce point where bulls will try to sustain the uptrend channel.
However, a break below this point would invalidate the upward trend and put more pressure on the pair.
USD/JPY is currently at a crossroad between breaking the downward trend and confirming it. The pair is now trading at 112.78 which marks the resistance level on the medium term, namely, the trend that started in the beginning of January. Since then, the USD/JPY pair has been going South as price is obediently trading in a descending channel.
What traders and investors now anticipate is whether the line would be broken. A break above 113 would put some pressure on bears as this could be a possible discontinuation of the trend and the formation of a new uptrend move.
On the other hand, if price remains in the channel, bears would attempt to bring it down to potential target at 110.10, second target is expected at 108 and major short-term target is 107.
Latest NFP's and Market Reaction
The latest NFP and Unemployment data is out:
USD Unemployment Rate (APR)
USD Change in Non-farm Payrolls (APR) comes in better than expected.
The aforementioned data was not enough to drive investors interest back to the US dollar and after the news release all USD pairs ended up with little to no change. Currently, the EUR/USD pair is trading higher than pre-news. Price is now 1.0989, a level marking the weekly high.
If the pair closes around current market price, next week could turn out to be a continuation of the upside move in the EUR/USD.
Above 1.10 would be an indication that market participants are drifting away from the US currency in regards to the rumors about a rate hike in June.
The EUR/USD pair opened with a gap again in the opening seconds of the trading session as traders and investors saw a new opportunity to go long based on the results of the French elections. The elected President is Emmanuel Macron with 66.1% of the votes.
The initial reaction in the EUR/USD was a sharp appreciation to a high of 1.1020, highest since the Presidential elections in the United States on Nov 9.
What's surprising for most market participants is that the positive reaction in the Euro did not last long. The effect lasted just a few hours before the pair started to depreciate. EUR/USD is now 1.0928 and it looks like the momentum has been lost.
What's needed now is fresh news such as weak US data or strong EU data in order for the pair to continue climbing above 1.10.
USD/JPY is on its way to conquer new highs. The pair reacted strongly bullishly to the bounce off of the 200SMA in mid-April when it reached a low of 108.13 and has been appreciating since then. It is now trading above 114 for the first time since mid-March.
If the bulls keep on pushing the pair, the first target is seen at 115.50 which has the potential to form a double top and put in motion the bear instincts to short the asset.
If that level is broken, then the next one is seen at 117, which falls on the upper trendline of the downtrend trading channel. This level would be harder to breach as it has stopped the bulls multiple times.
Recently, the US dollar has been showing signs of strengthening surprisingly right after the French elections when market participants expected the Euro to dominate the currency market.
The Yen has been going down against all its peers lately. The EUR/YEN pair is rallying since mid-April when price was a bit below 115. Then the French elections gave some boost to the Euro causing the pair to gap open in the end of April.
Currently, EUR/YEN is trading at 124.20 and although it made a minor move down yesterday, bulls have successfully managed to put it back up to the latest high at 124.50.
If the last high is broken, the pair would most likely continue to first bull target at 125.00. It is expected that bears will try to take control over it and make a corrective wave which could cause the pair to reduce in price to first probable target at 120.00.
The pair has made a great rally going about 1000 points in less than a month. Currently, the levels are a decisive factor for the future progress of the pair.
USD/CAD is having a strong rally that started since the pair was at support at 1.32249 just about a month ago. Today, the pair is 1.3714, marking a bull run with close to 500 points movement. Main trend on the short-term is expected to stay bullish if bulls manage to climb above the resistance at 1.38, which could be considered a double top.
On the other hand, bears might attempt to push the price down to first support zone at 1.36, second support zone at 1.3210, and major support zone at 1.30.
If they get above 1.38, then first target level is eyed at 1.3860. Technically, the pair is now in its highest point since February 2016 when the pair dived with more than 2500 points from 1.48 to below 1.25.
Partially, the appreciation of the pair is due to the depreciation of the Canadian dollar. Although, the US dollar also had its weak points recently, the USD bulls were able to sustain the momentum in the pair and keep it going up.
GBP/JPY is currently hesitating whether it should continue its move to the upside. The pair rallied from 135.60 in mid-April to a high of 148 last week. Since then, the Sterling has been taking a breather doing some correction moves and consolidation around the level of 146.70.
If the continuation continues with hints of going to the upside, first potential target is seen at 148.50, which forms a double top. If that level does not hold the bulls, second and stronger level is 150.
Well above the 200SMA, GBP/JPY has a strong momentum to the upside as the bull camp seems determined to push it higher.
The corrective wave might be expected to continue until tomorrow when the UK will release the GBP Core CPI and CPI data.