Market News & Analysis
Tuesday May 05 - FX Market Wrap USD/CHF in focus
Gary Christie May 6, 2020 6:43 AM
Tuesday May 05 FX Market Wrap - USD/CHF in focus
The US Dollar was bearish against most of its major pairs on Tuesday with the exception of the CHF and EUR. On the economic data front, the Trade Deficit rose to 44.4 billion dollars on month in March (44.2 billion dollars expected), from a revised 39.8 billion dollars in February. Markit's U.S. Services Purchasing Mangers' Index declined to 26.7 on month in the April final reading (27.0 expected), from 27.0 in the April preliminary reading, marking a record low. The Institute for Supply Management's Non-Manufacturing Index dropped to 41.8 on month in April (38.0 expected), from 52.5 in March, a low last reached in 2009. On Wednesday, the Mortgage Bankers Association's Mortgage Applications data is expected for the week ending May 1st.
The Euro was bearish against most of its major pairs with the exception of the CHF. In Europe, German judges assessed the ECB’s quantitative easing program, which was introduced in 2015, and said it partially violates the law. But this decision does not concern financial assistance measures taken by the EU or the ECB in the context of the current Covid-19 crisis. Research firm Markit has published final readings of April Services PMI for the U. K. at 13.4 (vs 12.3 expected). The European Commission has posted March PPI at -2.8 (vs -2.6% on year expected).
The Australian dollar was bullish against all of its major pairs.
Regarding major FX pairs,
• EUR/USD dropped 65pips to 1.0842 the day's range was 1.0826 - 1.0926 compared to 1.0896 - 1.0986 the previous session.
• GBP/USD slipped 4pips to 1.2439 the day's range was 1.2421 - 1.2484 compared to 1.2406 - 1.2516 the previous session.
• USD/JPY fell 23pips to 106.51 the day's range was 106.42 - 106.90 compared to 106.64 - 107.07 the previous session.
• USD/CHF jumped 74pips to 0.9724 the day's range was 0.9646 - 0.9735 compared to 0.9609 - 0.9663 the previous session.
• AUD/USD rose 9pips to 0.6437 the day's range was 0.6417 - 0.6476 compared to 0.6373 - 0.6435 the previous session.
• USD/CAD declined 39pips to 1.4048 the day's range was 1.4008 - 1.4095 compared to 1.4051 - 1.4152 the previous session.
• The dollar index gained 0.3pt to 99.787 the day's range was 99.299 - 99.970 compared to 99.087 - 99.599 the previous session.
FX pair in focus,
The USD/CHF jumped the most in Tuesday's trading. Prices remain supported by the 30-period moving average on a 30-min chart. The 61.8% Fibonacci retracement level from the swing high of 0.98 and swing low of 0.959 was broken to the upside in early trading indicating upside momentum. As long as the pair can remain above the 0.9685 pivot we may see a continuation above 0.9735 resistance towards a target of 0.9765.
Source: GAIN Capital, TradingView
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