Forex news for trading on April 28, 2017.

In other markets today:

  • Spot gold was up $4.10 or 0.32%
  • WTI crude oil is up $0.21 to $49.18
  • US stocks were lower. S&P fell by -0.19%, Nasdaq was down by -0.02% and the Dow was down by -0.19%
  • In the US debt market: 2 year yield 1.265% up 0.8 bp. 5 year 1.8175%, down -0.4 bp. 10 year yield 2.287%, down -0.7 bp. 30 year yield 2.956%, down -0.7 bp.

The US GDP data for the 1Q came in at plus 0.7% "annualized" vs 1.0% estimate. Since the quarter is "annualized", it means the QoQ growth was less than 0.2%. That is not a lot and certainly not what you would have expected with all the hoopla from the soft data spikes on the back of the Trump presidency. But, for whatever reason, the seasonal for the 1Q are notoriously off (with a downward bias), so the market shrugged off the weakness and chose to keep the dollar mixed with gains against the JPY, CHF, CAD and NZD and losses against the EUR, GBP and AUD.

The regional Chicago PMI came in better than expected at 58.3 vs 56.2. On Monday and Wednesday, we will get the national Manufacturing and non-Manufacturing data. The University of Michigan final look for April was weaker at 97.0 vs 98.0. Still, that is near high levels that existed before the 2008 crash that saw the index move from 97.0 to around 55.0.

Other than that, there was talk from Sec. of State Tillerson, UK PM May, BOJ Abe and even China about N. Korea and the risk from that tiny nation. Gold ended the day up $4.00 but I would not say the fear factor led to the small bid today.

In the stocks today, the indices ended near low levels despite blow away earnings from AMZN, Alphabet after the bell on Thursday. No new record for the Nasdaq today but the week ended with gains led but the Nasdaq which a gain of 2.32%.

In Canada today, PPI inflation data was mixed with the IPPI higher than expectations but the RMPI lower. Canada GDP was weaker than expectations.

What are the technicals telling us at the end of the week?

EURUSD. This week the EURUSD moved above the 200 day MA on a gap move on the back of the French elections. That 200 day MA comes in at 1.0837. Keep that MA in mind during next weeks trading. Longs in the market might use that level as a risk defining stop. Stay above, bullish. Move below bearish and we could be on our way to fill last weekends gap from Friday to Monday. PS the low today reached 1.0856. We are closing below 1.0900-10 resistance level. Get back above 1.0900-10 will be eyed on the topside. A key target in next weeks trading? The 50% of the move down from the May 3rd high. That retracement comes in at 1.09775.

GBPUSD. Remember when the GBPUSD shot up on April 18th on the back of the UK snap election announcement? For the next 6 days (use your hourly chart), the price ranged between 1.2858 and 1.2754 (only 104 pips). The 1.2754 level was the 38.2% of the move up from the April 18th low. So there was some digestion. There was some uncertainty, BUT the sellers were not really winning. They could only correct 38.2% of the move up. On Thursday, the price of the GBPUSD moved above the 1.2858 and over Thursday and Friday, the price moved up to a high of 1.29645. Now the 110 pips is not a whole lot over two days, but the buyers are winning and the shorts are not winning (CFTC commitment of traders still shows shorts are still fairly high at 91K vs 108K). If we go back below the 1.2900 level, maybe the buyers turn to sellers and we head back to test that 1.2854 level. Both are support levels in the new trading week.

USDJPY. IF you go to the 4-hour chart and put a Fibonacci from the high on March 10 to the low on April 17th, the 50% of the move comes in at 111.81. The high this week peaked at 111.777 on Wednesday, and then waffled up and down since then. The high today reached 111.714. That level is acting as a ceiling. The 100 hour MA is at 111.01 and rising. If the price goes below it, the sellers are more in control. Right now, there is a battle going on with 111.81 as resistance and 111.01 (100 hour MA as support). That is a great way to be going into a new week. Let the market decide.

USDCAD. I keep on referencing Adam's television appearance on BNN this week when speaking about the USDCAD. He lays out the fundamental idea for the CAD perfectly (CLICK HERE), The USDCAD marched higher (lower CAD) this week and it moved above its 50% retracement at 1.35746. It is closing at 1.3638. Although the fundamentals can paint a quite bearish fundamental picture, we need to combine that with the technical picture. Right now, the technicals support the fundamentals ABOVE 1.3574. Stay above and 1.3837 would be a target.

Next week, is FOMC week AND US employment week (I wonder why they schedule right before employment?). So the market will take dollar bullish/bearish clues from each. The FOMC is expected to sit tight this meeting. There is no press conference, and it simply has not been what this Fed's modus operandi has been. Does the Fed lay more pipe for reducing the balance sheet (i.e. time table or how it will be done)? If that does not come in a statement, Vice Chair Fischer speaks on Friday. Fed's Bullard, Evans and Rosengren will also have a microphone on Friday. So we will have more information by then. Watch bond yields for dollar clues. The 10 year reached a low of 2.162% on April 18th. The high this week reached 2.33%. The 100 day MA is at 2.42%. Key level if yields are moving higher (should support the dollar if so).

The US employment report is expected to show a change in NFP of 190K (last month was a weather related weak number of 89K). Average hourly earnings are expected to increase by +0.3% and 2.7% YoY. The Unemployment rate is expected to rise to 4.6% from 4.5% last month.

Finally, lots of earnings next week that could keep the upside going, or lead to a correction (if there are more disappointments in the results).

Have a great weekend!

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Below is a snapshot of the % changes of the major currencies vs each other. The GBP was the strongest. For the GBPUSD it marched higher away from the 1.2900-14 level today. The NZDUSD was the weakest.