BOBL TECHS: (M5) Monitoring Resistance

The BBDXY had an Asian range of 1230.09 - 1232.89. After bouncing off its lows yesterday these gains have been rather fleeting as the USD turned back down in our session as risk took a turn for the worse, watch price action around the week's lows around 1227/28. The USD has looked in real trouble as a rotation out of US assets seems to be gathering momentum and normal correlations with yield are breaking down.

• EUR/USD -  Asian range 1.1281 - 1.1345, traded bid from the open as stocks came under pressure. EUR/USD goes into the London open trading at the session highs. Traders are targeting a move back to 1.2000 in the Euro as the USD’s safe haven role is reassessed.
• GBP/USD - Asian range 1.3222 - 1.3266, dealing right at the day's highs going into the London session after breaking overnight highs. GBP has been playing catch up to the broad USD weakness.
• USD/CNH - Asian range 7.3176 - 7.3347, the USD/CNY fix printed higher again at 7.2133 strengthening the view the PBOC is going to slowly manage the currency lower . USD/CNH goes into the London open dealing around 7.3300.
• USD/JPY -  Asian range 142.47 - 143.51, under pressure most of the session going into London around 142.60, watch for a breach of the week's lows around 142.00. Huge support level around 140, a break here could see the move really accelerate.
• Cross asset : SPX -1.0%, Gold 3279, US 10yr 4.33%, BBDXY 1230, Crude oil 61.27.
• Data/Events : IT CPI, EC CPI, US Retail Sales, Powell to speak. 

Fig 1: USD/JPY Spot Daily Chart

Source: MNI - Market News/Bloomberg

Oil prices are moderately lower today in line with weaker risk appetite following Tuesday’s soft US Empire manufacturing print and concerns US-EU/China trade talks are making little progress. WTI is down 0.2% to $61.20/bbl close to the intraday low of $61.09, while Brent is 0.1% lower at $64.63/bbl after a trough of $64.43. The USD index is down 0.3%.

• Generally better-than-expected March activity data from China didn’t buoy oil prices. IP in the year to March rose 6.5% y/y after 5.9%. The market remains concerned that its trade war with the US will significantly reduce energy demand from the world’s largest oil importer. There are negotiations but an agreement still seems some way off.
• The rise in protectionism drove the IEA to cut its oil demand projection significantly for 2025 and 2026. It had already been forecasting a market surplus for some time.
• Bloomberg reported that there was a US crude inventory build of 2.4mn barrels last week, while products fell again with gasoline down 3mn and distillate 3.2mn, according to people familiar with the API data. The official EIA figures are out today.
• Later Fed Chairman Powell speaks at 1830 BST to Chicago’s Economic Club, also Hammack and Schmid appear. US March retail sales, IP and April NY Fed services & NAHB housing indices print. UK March CPI, euro area final March CPI and February current account are released. The BoC decision is announced and with expectations for unchanged rates.

• RES 4: 1.1608 High Nov 9 2021
• RES 3: 1.1555 1.382 proj of the Feb 28 - Mar 18 - 27 price swing
• RES 2: 1.1495 High Feb 10 2022 
• RES 1: 1.1473 High Apr 11 
• PRICE: 1.1344 @ 05:59 BST Apr 16
• SUP 1: 1.1144 High Apr 3 and a recent breakout level     
• SUP 2: 1.1001 20-day EMA     
• SUP 3: 1.0788 50-day EMA and a short-term pivot level     
• SUP 4: 1.0733 Low Mar 27 and a key short-term support

The trend outlook in EURUSD remains bullish and the pair is holding on to the bulk of its recent gains. The recent breach of 1.1144, the Apr 3 high and a bull trigger, confirmed a resumption of the uptrend and maintains the price sequence of higher highs and higher lows. Sights are on 1.1555 next, a Fibonacci projection. Initial support lies at the 1.1144 breakout level. Key support is unchanged at the 20-day EMA, at 1.1001.