• U.S. Dollar Trading (USD) strengthened yet again on Friday due to U.S business profit results surpassing expectations. This surge against the majors came despite U.S consumer sentiment falling in April to 26-year lows. Revised data showed that the sentiment index fell from 69.5 to 62.6, down from the initial April reading of 63.2. The US dollar rose against the majors on Friday on the belief that the Federal Reserve is nearing the end of its easing cycle. In share market news of the 263 firms in the S&P 500 index that have reported first quarter profits, 73% have matched or beaten market expectations. This result really helped drive the U.S dollar on Friday. The Dow Jones rose 42 points (0.3%), whilst the NASDAQ lost 6 points (-0.25%). Oil prices climbed 2% on Friday on supply disruptions in Nigeria and the North Sea and renewed tensions between the U.S and Iran. Prices increased US$2.46 a barrel to US$118.52. Looking ahead, Q2 borrowing announcement will be released on Monday.
• The Euro (EURO) fell to a three-week low versus the dollar on the release of an ECB report showing money supply growth slowed more than economists forecast in March. The news added to the Euro’s woes from earlier last week, with weak data on Euro zone manufacturing and German business sentiment. Euro zone data is sharply contrasting with better than expected US company earnings reports and dampening expectations for U.S interest rate cuts. The EURUSD traded at a high of 1.5707 and a low of 1.5555, before closing at 1.5605 in New York trading. Looking ahead, German Consumer Confidence for the month of April is to be released on Monday with a level of 4.4 forecasted, following on from 4.6 for the month of March. On Tuesday German CPI for April is out with expectations of no change from March’s 3.1% level.
• The Japanese Yen (JPY) appreciated versus the Euro today but hit a two-month low versus the U.S dollar after a government report showed Japan’s core consumer prices increased 1.2% in March from a year earlier, the most in a decade. There is now room for speculation the BoJ may increase rates from 0.5% at some point later in the year. The USDJPY traded at a high of 104.82 and a low of 103.90, before closing at 104.46 in New York. Looking ahead, Japanese Unemployment for March is to be announced on Tuesday, with forecasts of no change from their current levels of 3.9%.
• The Sterling (GBP) climbed to a three-week high against the Euro along with steadying against the U.S dollar. This was predominantly driven by increasing concerns about the health of the Euro Zone economy and key trading technical levels. Data released from the UK on Friday saw a GDP level as expected at 0.4% for Q1, down from 0.6% for Q4. Whilst year-on-year GDP came in slightly below forecasts of 2.6% at 2.5%, down from 2.8% previously. The GBPUSD traded at a high of 1.9889 and a low of 1.9679 before closing at 1.9821 in New York. Looking ahead, Nationwide House Prices for April is to be released on Monday with expectations of -0.7%, down from -0.6% for March.
• The Australian Dollar (AUD) softened against the dollar as strong profit results really drove the U.S strength on Friday, combined with an ever-increasing belief the Fed is near the end of its easing of monetary policy. The AUDUSD traded at a high of 0.9420 and a low of 0.9291, before closing at 0.9319 in New York. Looking ahead, Australia’s Trade Balance for March is released on Monday, with expectations of a surplus of $400m, up from $258m in February. On Tuesday, the NAB Business Confidence level for Q1 is to be announced following a previous level of 6.
• Gold (XAU) prices rose on Friday, shaking a two-day slump, following rising energy prices making the appeal of gold more attractive as an inflation hedge. Prices reached a high of $896.50, before US strength saw gold pair its gains to end up US30c an ounce to US$889.70.
• Euro – 1.5620
Initial support at 1.5556 (Apr 25 low) followed by 1.5510 (Apr 3 reaction Low). Initial resistance is now located at 1.5707 (Apr 25 high) followed by 1.5891 (Apr 24 high).
• Yen – 104.60
Initial support is located at 103.90 (Apr 25 low) followed by 103.32 (Apr 24 low). Initial resistance is now at 104.82 (Apr 25 high) followed by 105.58 (76.4% retracement of the 108.61 to 95.76 decline).
• Pound – 1.9825
Initial support at 1.9677 (Apr 25 low) followed by 1.9600 (Apr 16 low). Initial resistance is now at 1.9974 (Apr 23 high) followed by 1.9999 (50% retracement of the 2.0398 to 1.9600 decline).
• Australian Dollar – 0.9350
Initial support a 0.9272 (Apr 18 low) followed by 0.9249 (A50% retracement of the 0.8953 to 0.9544 advance). Initial resistance is now at 0.9422 (Apr 25 high) followed by 0.9496 (Apr 24 high).
• Gold – 890.90
Initial support at 878.30 (Apr 25 low) followed by 873.00 (Apr 1 reaction low). Initial resistance is now at 906.50 (Apr 24 high) followed by 922.86 (Apr 23 high).