US: Trump Truth Social Post On Golden Dome & Canada As The 51st State

• RES 3: 97.190 - High May 5 2023
• RES 2: 96.932 - 76.4% of Mar-Nov ‘23 bear leg 
• RES 1: 96.860 - High Apr 07
• PRICE: 96.680 @ 15:24 GMT Apr 25
• SUP 1: 95.900 - Low Jan 14  
• SUP 2: 95.760 - Low 14 Nov ‘24
• SUP 3: 95.480 - Low Jan 11 2023 and a major support 

Aussie 3-yr futures continue to circle just below recent contract highs, having cleared resistance on the continuation contract. The rally has taken out resistance at 96.730, the Sep 17 ‘24 high. On the downside, any reversal lower from current levels would signal a resumption of a downtrend. A deeper sell-off would refocus attention on 95.760, the 14 Nov ‘24 low. 

J.P. Morgan: "Staying bullish on EUR/USD and setting sights on 1.20
Outlook: EUR/USD hit our high-side, out-of-consensus targets of 1.14-1.16. While EUR/USD is overshooting on some near-term metrics, it’s too early to call an end to this new regime. US moderation is still nascent and the world is still long US equities so related re-balancing should continue to be USD-negative. EU fiscal will be an insulator. Higher odds of a structural USD weakening in the coming years should also be a contributor, although this factor is the least quantifiable. Stay bullish EUR/USD; raise upside targets to 1.20-1.22 for turn of the year. Near-term could see some consolidation but look for 1.15 to be re-tested.

Macro Trade Recommendations: Keep EUR/USD long in cash. Take profit on EUR/USD call spread given largely monetised. Entered GBP short vs NOK, SEK in cash midweek along with short EUR vs NOK, SEK cash basket. Hold EUR/JPY short in cash and options. Hit-take-profit-stop in long JPY vs USD, NZD cash basket. Keep EUR/SEK put spread. Hold EUR/CHF, EUR/GBP dual digital. Take-profit-stop hit in long EUR/GBP cash. Stop out of short CHF/JPY.

Emerging Markets FX: Stay UW EM FX in GBI-EM Model Portfolio with higher conviction shorts in EM Asian currencies and a more constructive view on CEE.

FX Derivatives: Turn tactically bearish on EUR vol; expressions are covered EUR calls, EUR call calendar spreads, USD/Scandi-EUR/USD vol spreads, and short EUR/BRL vega. Own GBP vol risk premium, selectively sell USD/Asia front-end vol, and look to own FX appreciation tails in in ‘manipulator’ watchlist candidates.

Technicals: EUR/USD rally stalls but maintains the springtime range breakout zone for now. Cable rally stalls near the Sep 2024 peak and other nearby resistance levels. USD/JPY bounces from critical pattern support near 140. AUD/USD rally meets key resistance near 0.64 and triggers short-term sell signals." 

GOLDMAN SACHS: "USD: Further to fall. Even after a swift move in recent weeks, we believe that the Dollar has further to fall. Less exceptional US asset returns will compress the Dollar's high valuation as global allocators move to a more diversified portfolio. Within this framework, we think investors are too worried about positioning—while tactical Dollar shorts have increased and moves have outstripped our short-term GSBEER models, the whole point is that structural positioning is still very long—and too focused on flows and repatriation calculations. While this matters, we do not view it as a “stock” of unhedged Dollar assets that needs to be corrected. Instead, we are more focused on the likely shift in future allocations. Historically, these types of changes in investor appetite led to large, persistent changes in exchange rates. But it is not a sure thing, and cannot occur with the same speed and conviction that we have observed through much of the last month; the concerning correlations of the last few weeks necessitated some of the policy changes the US administration made over the last few days. And we should be clear that the announced, or hinted, policy recalibrations are directly aimed at some of our key concerns. First, less DOGE-related policy uncertainty could help restore consumer confidence in the labor market, which was responsible for some of the initial downturn in US surveys. Second, President Trump’s suggestion that US-China tariffs could be lowered substantially is meaningful because this would mitigate some of the hit to US firms’ profits and US households’ real income that is central to our view. Third, if efforts to compel other countries to impose tougher restrictions on China in exchange for trade deals with the US are successful, it would change US firms’ negotiating position. We think this is crucial for understanding the Dollar impact. Finally, President Trump’s assurance that he will not attempt to remove the Fed chair provides some marginal assurance. However, after frequent changes in policy positions, we think it will take some time for investors to be convinced. Just as importantly, even after the exemptions and reversals, planned and actual tariff increases are still very large, and US businesses and consumers may be frozen by the uncertainty, which remains high and is why our economists are still on recession watch. We expect European currencies to continue to be the main beneficiary of this backdrop on a structural basis, while Yen longs provide the best hedge if next week’s employment report shows clear signs of a labor market slowdown and raises risks of deeper and earlier Fed cuts."