EURUSD looks to turn around after six days of losses

Markets continued yesterday with broad based USD-strength and a general positive mood in the markets which followed through in Asia, despite a drop in Hang Seng. The Nikkei closed above the Ichimoku cloud, making the technical outlook changing from negative to positive and USDJPY printed May highs at 109.35 with the outlook negative. Despite an increase in the preliminary March leading index from Japan, Nikkei was still on the offer. Oil prices retreated ahead of the weekly inventories to be released in the US session on Wednesday.

From the EU, markets were generally on the positive side yesterday, on back of positive German Trade data, which outshined weak industrial production figures from France and Italy. This morning, the EuroStoxx50 has turned negative with utilities, energy and financials leading the drop. In FX, EURUSD looks to turn around after six days of losses, testing the 1.14-figure this morning, supported by the 100-SMA on 4H, currently coming in at 1.1375.

EURUSD 4H

20160511 EURUSD.H4

The key figure from the EU today is the March UK Industrial and Manufacturing figures at 1030CET, where consensus in the markets is for upbeat figures. Looking at Cable against the FTSE/SP500 ratio, this gives a somewhat indication of the next move in Cable and this points lower at current stage. Following three weeks of gains, the pair turned round last week and is so far printing a doji in this week’s trading. Should the figures come out lower than expected, we could see a test and possible break of 1.4375 – key support for now.

GBPUSD Daily

20160511 GBPUSD.Daily

GBPUSD vs. FTSE100/S&P500 (Source: Reuters)

20160511 - GBPUSD vs. SPX

 

From the US session, we don’t have any particular releases/events on  neither the macro side nor monetary side, but the markets will be tuning into the oil inventories and position themselves for and active Thursday/Friday with Retail Sales and Inflation figures in focus.

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