• U.S. Dollar Trading (USD) strengthened against most of the majors on Thursday as the U.S saw positive data released combined with a surging equity market and more interest rate conviction which prompted confidence in the dollar. The ISM Manufacturing Index for April came in above expectations of 48, matching March’s index of 48.6. The PCE Index for March came in above the previous level of 0.1%, seeing a result of 0.3%. Core PCE bettered suggestions of 0.1%, with a result of 0.2%. Jobless claims did come in worse than the expected 360k with a result of 380k. U.S personal income rose 0.3% in March with spending up 0.4%, ahead of expectations. In share market news, U.S equities soared as more certainty in interest rates and positive corporate news gave investors confidence. The Dow Jones finished 189 points higher (1.5%), whilst the NASDAQ surged 67 points (2.8%). Oil prices fell in response to a stronger dollar, weakening U.S demand and the ending of a strike by oil workers in Nigeria. Prices dropped US94c a barrel to US$112.52. Looking ahead, Non-farm Payrolls for April is announced on Friday with expectations of a drop to -100k, worse than March’s result of -80k. The Unemployment rate for April is also announced on Friday, with forecasts of a rise from 5.1% to 5.3%.
• The Euro (EURO) fell to a five week low against the dollar as stronger than predicted U.S data results and rising equity markets prompted investors to support the dollar and sell-off the Euro, despite it being a public holiday with no data being released. The EURUSD traded at a high of 1.5643 and a low of 1.5431, before closing at 1.5458 in New York. Looking ahead, PMI Manufacturing for April is announced with forecasts of an index of 50.8, down from 52 for March, but still above that key 50 expansion level. German Retail Sales figures for March are due out with predictions of a growth of 0.6%, up from February’s level of -0.7%.
• The Japanese Yen (JPY) remained weak against the dollar owing to rising U.S equity markets and more confidence in the Fed’s rate stance prompting investors toward the higher yielding dollar. The USDJPY traded at a high of 104.58 and a low of 103.55, before closing at 104.39 in New York. No data is being released from Japan on Friday.
• The Sterling (GBP) was resilient against the dollar and pushed higher against its European counterparts on Thursday. UK factory PMI saw a result of 51.0 in April, slightly better than the 50.9 forecast, but a drop from 51.3 for March. The GBPUSD traded at a high of 1.9909 and a low of 1.9713, before closing at 1.9740 in New York trading. No data is released on Friday.
• The Australian Dollar (AUD) weakened on Thursday as the U.S dollar strengthened and commodity prices softened. The Aussie was also hit by weak dwelling approvals yesterday. The AUDUSD traded at a high of 0.9445 and a low of 0.9308, before closing at 0.9337 in New York trading. Looking ahead, Retails Sales figures for March are to be released on Friday with forecasts of a drop from -0.1% to -0.3%.
• Gold (XAU) prices fell on Thursday in line with commodity prices as a whole owing to U.S dollar strength. Prices fell US$14.20 an ounce to US$850.90.
• Euro – 1.5465
Initial support at 1.5510 (Apr 3 reaction low) followed by 1.5408 (Mar 25 Low). Initial resistance is now located at 1.561 (Apr 29 high) followed by 1.5707 (Apr 25 high).
• Yen – 104.75
Initial support is located at 103.23 (Apr 29 low) followed by 102.68 (Apr 22 low). Initial resistance is now at 104.88 (Apr 30 high) followed by 105.58 (76.4% retracement of the 108.61 to 95.76 decline).
• Pound – 1.9775
Initial support at 1.9624 (Apr 30 low) followed by 1.9600 (Apr 16 reaction low). Initial resistance is now at 1.9913 (Apr 29 high) followed by 1.9966 (Apr 28 high).
• Australian Dollar – 0.9310
Initial support a 0.9308 (May 1 low) followed by 0.9294 (Apr 29 low). Initial resistance is now at 0.9445 (May 1 high) followed by 0.9473 (Apr 30 high).
• Gold – 850.00
Initial support at 847.10 (May 1 low) followed by 845.80 (Former resistance Nov 8). Initial resistance is now at 881.90 (May 1 high) followed by 896.50 (Apr 25 high).