Forex news and economic data headlines for the European session 5 May 2016
News:
- Iran's Javadi says oil production now up to 3.7m bpd
- ECB trots out the same old waffle in the latest monthly bulletin
- ECB Mersch says the effectiveness of negative rates is probably overestimated
- Italian non-performing loans? It ain't as bad as made out says Visco
- Phillip Lowe replaces Glenn Stevens as RBA governor
- Forest fires still rage in Alberta. State of emergency declared.
- US Non-Farm Payrolls: BOA Merrill liking a USD long
- Barclays sees Brexit factor making more of a negative impact on UK GDP
- Can we chalk up another 1.1500 break failure in EURUSD?
- Disappointing UK data but traders were ahead of the game
- Option expiries 10am NY cut today 5 May
Data:
- April 2016 UK Markit CIPS services PMI 52.3 vs 53.5 exp
Another session that took a while to make its mind up but in the end we've seen strong US$ demand return as the dominant theme.
EURUSD and USDJPY began pinned around 1.1490 and 107.00 with large option expiries in play but then we saw US$ buying take hold and the euro led other core pairs lower. A break down on EURUSD through 1.4470 saw stops triggered to 1.4450 support before then breaking lower again to hit the next layer of support/demand at 1.1420.
USDJPY meanwhile edged up to 107.30 but tempered by EURJPY sales while USDCHF motored on to 0.9650 with EURCHF holding firm. EURGBP had once again capped into 0.7930 and came under renewed pressure to test 0.7880 led by a post-UK data rally for the pound despite a weaker than expected reading. Traders had pre-empted that and were quick to cover GBP shorts.
That didn't last long though and with cable once again failing into 1.4520-30 we've fallen all the way back through 1.4460-70 support to post 1.4444 so far lifting EURGBP back to 0.7905.
USDCAD has been slow to capitalize on the greenback grabbing as rising oil prices continue to cap rallies while AUDUSD has given up above 0.7500 again and is retreating again toward the corp demand at 0.7450.
A quiet day data-wise but we have a few Fed talking heads later to throw into the mix.
