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Monday, May 8th
Today France continues to celebrate Emmanuel Macron’s win in the presidential election with 63.85% of votes against his far-right opponent Marine Le Pen, who gained 36.15% of votes, thereby supporting the Euro across the market. During his speech, Macron stated, that he will work to “rebuild links between Europe and its citizens”, that clearly shows his intentions regarding further cooperation with the EU. Today the EUR/USD pair opened with strong bullish gap above its psychological mark 1.1000, that is the highest level since November 2016. However, the pair failed to sustain its gains and dropped to the region of 1.0960, as Macron’s win in the election was highly expected and traders had already priced in such outcome. Today only secondary data releases are scheduled for this trading session, so the pair will continue to follow global market’s trend to set up its further direction.
The AUD/USD pair was showing offered tone in Asia, having refreshed its daily lows at 0.7386, as Australian economy provided investors with horrible data from its housing market. On the other hand, following upbeat Chinese Trade Balance has reignited some bids around the Aussie, forcing the pair to change its direction and reach the mark of 0.7416 at the European opening. Looking ahead, today the pair most probably will continue to trade under bearish pressure, as “Macron Trade”, which was favoring risk-on trend, is fading, while investors are still digesting Friday’s positive data from the US labor market. In the data front, both economies will keep silence at the start of this week, so broad market’s sentiments will keep navigating the pair during this trading session.
The USD/CAD is consolidating its Friday’s sharp reversal from its 14-month highs, following recovery in oil prices. At the end of the last week the pair came under strong selling pressure, stepping away from its recent tops, marked at 1.3793 spot, as traders locked in some profits after oil price bounced off its half-year lows, that led to pair’s 150-pips drop, despite positive NFP numbers. However, prospects of Fed rate-hike in June are slowly gathering pace, thereby limiting pair’s further decline. Looking ahead, today nothing noteworthy is scheduled in data calendar from both neighbors, so the pair will keep tracing global market’s trend and oil prices’ actions to determine its further course.
The GBP/USD pair failed to sustain its positions, posted in 1.2990 region during the Asian session, which was last seen in September 2016, as traders took some profits off the table after strong upside rally, witnessed last week. However, the pair managed to retake its bullish tone, as investors are gearing up for another bloc of crucial events of this week – BoE Interest Rate Decision and BoE Inflation Report, that will be announced this Thursday. On the other hand, mild US dollar’s correction and improving prospects of Fed rate hike in June, which are additionally supported by recent positive data from the US labor market, are weighing the pair at the start of this week. Today we have quiet data session with only secondary reports from both sides scheduled in it, so the pair will continue to follow global market’s sentiments during this Monday.
The main events of the day:
None
Support and resistance levels for the major currency pairs:
EURUSD S. 1.0928 R. 1.1034
USDJPY S. 111.80 R. 113.24
GBPUSD S. 1.2868 R. 1.3036
USDCHF S. 0.9827 R. 0.9923
AUDUSD S. 0.7343 R. 0.7461
NZDUSD S. 0.6835 R. 0.6967
USDCAD S. 1.3542 R. 1.3844
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