The US dollar caught a bid in Europe, and it stayed in demand until mid-morning in New York. The US economic calendar was light and did not offer any distraction to FX traders focused on President Trump’s 1900 GMT speech.
Sterling got things started in European trading when UK April House Prices were lower than expected. Traders were already bearish on GBPUSD and that data just gave them another excuse to sell. GBPUSD tumbled from 1.3588 in early London trading to 1.3486 around 1600 GMT. Prices rebounded into the afternoon as Sterling traders appear more concerned about “Super Thursday” and the Bank of England interest rate outlook than, US/Iran issues. GBPUSD has recorded a double bottom at 1.3484 on a daily chart. A break above 1.3570 gives scope to 1.3750.
Chart: GBPUSD daily
Source: Mocaz Charts
EURUSD has been on a one-way street lower since April 24 and as long as prices are below 1.1920 further downside to 1.1790 is likely. A break above 1.1920 would extend gains to 1.1980 and then 1.2020. There isn’t any top-tier Eurozone economic data due today to alleviate the downward pressure.
EURUSD 4 hour highlighting support zone
Source: Mocaz charts
USDJPY traded with a little bit of chop leading up to President Trump’s speech but managed to keep the March 22 uptrend intact which comes into play in the 108.80-109.00 area. A break above 109.60 would target 110.00-110.50. On Tuesday, Fed Chair Jerome Powell said he thought the market interpreted the “dot-plot” forecast correctly, suggesting two more rate hikes are likely in 2018. US 10-year Treasury yields ticked higher, but need to get back above 3.0% to ignite a strong USDJPY rally.
Chart: USDJPY 4 hour
USDCAD took out key resistance in the 1.2920-50 area on Tuesday which sets the stage for addition gains to the 2018 peak of 1.3120. The uptrend from April 18 is in place while prices are above 1.2880 which is being guarded by strong support in the 1.2910-20 area. High oil prices are not providing and support for the Canadian dollar. It is suffering from divergent CAD/US interest rate differentials and broad US dollar strength.
Chart: USDCAD 4 hour
Source Mocaz charts.