Thursday, May 14 FX market update - USD/CAD in focus
The US Dollar was bullish against most of its major pairs on Thursday with the exception of the CAD. On the economic data front, the Import Price Index fell 2.6% on month in April (-3.2% expected), from a revised -2.4% in March, a low last seen in 2015. Initial Jobless Claims declined to 2,981K for the week ending May 9th (2,500K expected), from a revised 3,176K in the week before. Continuing Claims rose to 22,833K for the week ending May 2nd (25,120K expected), from a revised 22,377K in the previous week, marking a record high.
On Friday, Retail Sales for April are expected to drop 12% on month, from a revised -8.4% in March. Empire Manufacturing for May is expected to slide to -60.0 on month, from -78.2 in April. Industrial Production for April is expected to fall 12.0% on month, from -5.4% in March. Finally, the University of Michigan's Consumer Sentiment Index for the May preliminary reading is expected to decrease to 68.0 on month, from 71.8 in the April final reading.
The Euro was bearish against all of its major pairs. In Europe, Germany forecasts 2020 tax revenues will be 98.6 billion euros less than previously projected. Separately, Bank of England Governor Andrew Bailey said that negative rates are not currently considered by the institution. On the statistics front, The German Federal Statistical Office has posted final readings of April CPI at +0.9% (vs +0.8% on year expected). France's INSEE has reported 1Q jobless rate at 7.8% (vs 8.4% expected).
The Australian dollar was bearish against all of its major pairs.
The USD/CAD had one of the largest moves on Thursday after declining 59pips. The pair broke below a rising wedge reversal pattern on a 60 min price chart. As long as 1.407 remains key resistance, we anticipate further downside towards 1.40 and 1.397 support areas.
Source: GAIN Capital, TradingView
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