US Open – 15.04.14

EURUSD – pretty much range trading during the Asian and European sessions. It is pushing a bit lower and it looked like it broke through 1.38 opening up the price to go down to 1.37500 but is now trading right around that price. We have a negative outlook towards euro and a positive one towards the dollar so we will be waiting to sell the rallies. We also like selling EUR against the CHF, we believe we can gain more there than against the dollar specially with the unstable situation in Russia and Ukraine now and CHF usually seen as a safe heaven currency. We have also entered a short EURGBP position with euro weakness and sterling strength.

GBPUSD – UK CPI has moderated to 1.6% YoY in March from 1.7% in February, inline with the consensus estimate. Core CPI also ticked down to 1.6% from 1.7%, inline with expectation.

Both RPI and RPIX, which excludes mortgages, eased to 2.5% YoY in March from 2.7% in February inline with expectations.

PPI input surprsied to the downside (-6.5% YoY versus -6.1% expected and -5.8% prior) while PPI output surprised to the upside (0.5% YoY versus 0.3% expected and 0.6% prior).

GBPUSD initially dropped 20pips to 1.6661 on the release, but quickly reversed course and has rallied to 1.6715 as the breakdown paints a more optimistic picture than the headline numbers.

So it has now traded back into range and it is back to range trading.

USDJPY – We have sold yesterday at 102 as we mentioned and it has traded down to 101.650 which wasn’t even our first level of take profit but it has now given us a reversal and we have taken our trade off with a 30 point profit as its has gone into a tight range. We believe there has to be some stronger news to move it anywhere and we are looking to buy into a correction in the longer term.

AUDUSD – RBA minutes the main overnight event which to me highlighted increasing optimism over the domestic data and limited comments on the level of AUD. The only major domestic concern considered was that of unemployment but we now know given last week’s print that this trend has corrected with unemployment unexpectedly falling. On the AUD, the key comments were as follows:

“The Australian dollar had appreciated, partly in response to domestic economic data, and it was now close to the level in November 2013, although on a trade-weighted basis the exchange rate was still about 12 per cent below its peak a year earlier”

“While the decline in the exchange rate from its highs a year earlier would assist in achieving balanced growth in the economy, this would be less so than previously expected given the rise in the exchange rate over the past few months.”

USDCAD – it failed to break the 1.10 level so nothing has changed from what we said yesterday.

That is pretty much that for today.

We are looking for the CAD Manufacturing Sales and the US Core CPI at 1:30 BST. Then just after that Yellen will speak again and that is it till late at night when the NZD CPI comes out at 11:45 BST.

Have a good day trading and good luck.