The earnings season continues in the United States…
Morning brief for April 19
The women are inconstant, unpredictable creatures, what can I say. Since the very first speech as a Tory leader, Theresa May repeatedly told the press that she would not seek a snap election in the UK because it would cause "instability." And now look at her! She is calling for an early election in June in order to guarantee certainty and stability. Polls currently show the Tories outstripping the Labours, so there is a good chance that the government might increase its majority in Parliament and cement authority that is so needed in the troublesome period of Brexit negotiations. The Pound rallied hard on the news and hit 1.2905 overnight. With no fresh catalyst, it skipped a few points in Tokyo session. The bullish undertone is still intact though as long as quotes are hovering above 1.2660. There is a room for further extension towards 1.2950.
EUR/USD edged down to 1.0720. In just a few days before the first round of French presidential elections, the majority of polls show independent Emmanuel Macron and the National Front’s Marine Le Pen taking the top two spots. In the second round, the win is promised to Macron. Yet both front-runners have been incessantly losing their support in the course of the past two weeks, and Republican Francois Fillon and Communist-backed Jean-Luc Melenchon are now within striking distance. Today’s focus will be on the Eurozone final CPI figures coming at 12:00 pm. The impact on EUR/USD pair will be limited as traders have already put up with the disappointing flash measure that came in at 1.5% instead of expected 1.8%.
USD/JPY was trading a bit higher at around 108.70 as geopolitical tensions amid Korean peninsula eased off a bit. Traders might benefit from Trump’s serenity for a while and capitalize on the strengthening USD. On the downside, you may find several supports located at 108.10 and 108.00.
Aussie was one of the underperforming currencies in Tokyo session. AUD/USD fell below 0.7520 (100-day MA) mainly on the tumbling iron ore prices and dovish RBA meeting minutes we got on Thursday.
USD/CAD went higher to 1.3400 as we received reassurance that Fed officials are still sticking to the script of two more rate hike for this year. The Fed’s George said yesterday that she would stick to the base case and wouldn’t allow the inflation rate to overshoot the 2% goal.
Oil prices were a bit higher in the Asian session being supported by outages sparked in Venezuela (one of the largest oil-producing countries). Yesterday crude oil futures dropped a bit on the private inventory data in the US. Today we will receive the official EIA numbers on the US crude inventories that might reflect the data we saw yesterday, so there can be some additional dips in oil prices.
Traders and investors are curious about the future of the Venezuelan crisis and its impact on the oil market.
We are slowly approaching the final deadline for the trade truce. Let's consider how the fresh trade talks between the US and China next week may affect the market.
The market is likely going to continue declining. The main intraday target is the next support at 1.1526 - 1.1508...
Bullish Ichimoku Cloud with horizontal Senkou Span A and B; a golden cross of Tenkan-sen and Kijun-sen with horizontal lines; the market is under strong resistance and prices entered into the channel Tenkan-Kijun.
AUD/CAD falling inside impulse waves 3 and (C) Next sell target - 0…