27-Apr-2020

1) Lifting the Lockdowns Is Lifting the Euro
2) EUR/USD Pair Had Some Good Two-Way Price Moves on Thursday
3) USD/CAD Flirting With Daily Lows, Around Mid-1.4000s

1) Lifting the Lockdowns Is Lifting the Euro

Lifting the lockdowns is lifting the Euro; Europe’s largest countries have all reported significant improvements in COVID-19 statistics and are moving to reopen the economies.

“Spain reported 288 deaths on Saturday; the lowest in over a month and active cases are dropping as well while Italy announced a three-pronged program starting from May 4. The country reported 260 mortalities on Sunday, the lowest since March 11.”

“In France, 242 losses of life were reported on Sunday, the lowest in more than a month. Meanwhile, Germany confirmed 110 deaths on Monday, the lowest since mid-March.”

“In the US, the spread of the virus is also slowing and several states are moving toward reopening as well, yet New York is set to remain under shelter-at-place orders through May 15. The relative optimism is weighing on the safe-haven dollar.”

“Another reason for the cheerful mood is the BoJ’s announcement that it is lifting restrictions to buying bonds.”

Euro/dollar has surpassed the downtrend resistance line that capped it from mid-April but is struggling to conquer the 50 Simple Moving Average on the four-hour chart. It remains capped by the 100 and 200 SMAs. Momentum and the Relative Strength Index are flat. All in all, the picture is improving for the bulls but remains mixed.

Resistance awaits at 1.0885, which held the currency pair down late last week, and then by 1.0930, a swing high from early in the month. The monthly high of 1.0995 is next.

Support awaits at 1.0810, a low point last week, and then by the early April trough of 1.0770 and the monthly low of 1.0727.

2) EUR/USD Pair Had Some Good Two-Way Price Moves on Thursday

The USD/CAD pair edged lower through the early European session and is currently placed near the lower end of its daily trading range, around the 1.4040 region.

The pair failed to capitalize on last week’s attempted recovery from the key 1.40 psychological mark, instead met with some fresh supply on the first day of a new trading week amid the prevalent US dollar selling bias.

The greenback extended the previous session’s modest pullback from 2-1/2 week tops and was further pressured by some follow-through recovery in the global risk sentiment, as depicted by a positive mood around the equity markets.

The global risk sentiment remained well supported by hopes for the reopening of the US economy, though uncertainty over the severity of the economic fallout from the coronavirus pandemic might keep a lid on the optimistic mood.

Meanwhile, the intraday bearish pressure seemed rather unaffected by a fresh leg down in crude oil prices, now down around 13.5% for the day, which tends to undermine demand for the commodity-linked currency – the loonie.

Oil prices failed to capitalize on last week’s strong recovery, instead witnessed some fresh selling on Monday amid concerns that production cuts might not be enough to catch up with the collapse in demand caused by the virus outbreak.

It will now be interesting to see if the pair is able to attract any buying interest at lower levels or slides back to challenge the 1.40 mark amid absent relevant market-moving economic releases, either from the US or Canada.

3) USD/CAD Flirting With Daily Lows, Around Mid-1.4000s

The GBP/USD pair refreshed session tops, around mid-1.2400s in the last hour, albeit quickly retreated few pips thereafter.

The pair caught some fresh bids on the first day of a new trading week and built on last week’s recovery move from the 1.2245 horizontal support. The pair climbed further beyond the 1.2400 mark and was being supported by the prevalent US dollar selling bias.

A positive mood across the global equity markets forced the USD to extended Friday’s dismal US Durable Goods Orders-led retracement slide from 2-1/2 week tops and continued pushing the pair higher for the fourth straight session.

The positive momentum seemed rather unaffected by persistent worries over the economic fallout from the coronavirus pandemic and even shrugged off increasing prospects of an extended lockdown in the UK, resurfacing Brexit concerns.

It is worth reporting that the UK government maintained its stance on Brexit and has repeatedly refused to extend the transition period beyond the end of this year. This might eventually keep a lid on any further gains for the major.

The pair maintained its bid tone and held steady around the 1.2430 region after the UK Prime Minister Johnson said that the first phase of the virus outbreak might be peaking, albeit highlighted the risk of a second spike in infections.

In the absence of any major market-moving economic releases, either from the UK or the US, the broader market risk sentiment and fresh Brexit-related headlines will be looked upon to grab some short-term trading opportunities.