Cozfx Daily Market Analysis

COZfx: Loonie trading higher, ahead of Canada’s building permits and housing starts data

COZforex: For the past trading session, the USD marginally rose against the CAD and closed at 1.3409.

Macroeconomic data revealed that Canada’s seasonally adjusted Ivey PMI unexpectedly eased to a level of 55.0 in February, compared to a reading of 57.2 in the prior month and confounding market consensus for the PMI to climb to a level of 58.5. In contrast, the nation’s international merchandise trade surplus rose more-than-estimated to a level of C$0.81 billion in January, compared to a revised international merchandise trade surplus of C$0.45 billion in the previous month.

In the Asian session, the pair is trading at 1.3401, with the USD trading 0.06% lower against the CAD from yesterday’s close.

In technical analysis, COZforex senior currency strategist Ian • Quigley said: USD/CAD is expected to find support at 1.3376 and a fall through could take it to the next support level of 1.3352; Meanwhile, the pair is expected to find its first resistance at 1.343, and a rise through could take it to the next resistance level of 1.346.

Ahead in the day, Canada’s housing starts for February and building permits for January, will be closely watched by market participants.

(COZ forex UK)

COZfx: UK’s manufacturing, industrial and construction output, all dropped in January

COZforex: For the past trading session, the GBP rose 0.18% against the USD and closed at 1.2175 on Friday.

On the macro front, Britain’s manufacturing production dropped more-than-anticipated by 0.9% on a monthly basis in January, following a revised rise of 2.2% in the prior month, while investors had envisaged for a fall of 0.7%. Further, the nation’s industrial production registered a less-than-expected drop of 0.4% in January, compared to a revised rise of 0.9% in the previous month. Moreover, the nation’s construction output eased 0.4% in January, higher than market expectations for a drop of 0.2% and following a rise of 1.8% in the prior month. However, the nation’s total trade deficit narrowed to a level of £1.97 billion in January, following a revised deficit of £2.03 billion in the prior month, whereas markets were anticipating the nation to register a deficit of £3.1 billion.

In other economic news, NIESR estimated that UK’s gross domestic product rose 0.6% in the three months to February, meeting market expectations and compared to a revised rise of 0.8% in the November 2016-January 2017 period.

In technical analysis, COZforex senior currency strategist Ian • Quigley said: GBP/USD is expected to find support at 1.2147 and a fall through could take it to the next support level of 1.2116; Meanwhile, the pair is expected to find its first resistance at 1.2198, and a rise through could take it to the next resistance level of 1.2218.

With no economic releases in the UK today, investors will look forward to global macroeconomic news for further direction.

(COZ forex UK)

COZfx: Australia’s unemployment rate surprisingly jumps to 5.9% in February

COZforex: For the past trading session, the AUD rose 1.89% against the USD and closed at 0.7701.

In commodities, LME Copper prices rose 1.8% or $103.0/MT to $5850.0/MT; Meanwhile, Aluminium prices rose 0.7% or $12.0/MT to $1863.0/MT.

In the Asian session, the pair is trading at 0.768, with the AUD trading 0.27% lower against the USD from yesterday’s close, after the release of a downbeat Australian jobs report.

Early morning data indicated that Australia’s seasonally adjusted unemployment rate rose to 5.9% in February, hitting its highest level in thirteen months, as the total number of people with jobs fell by 6.4K last month, while the market forecasted a rise of 16.0K. The unemployment rate was expected to remain steady at 5.7%. Further, the nation’s consumer inflation expectations advanced 4.0% in March, compared to a gain of 4.1% in the prior month.

In technical analysis, COZforex senior currency strategist Ian • Quigley said: AUD/USD is expected to find support at 0.7588, and a fall through could take it to the next support level of 0.7495. The pair is expected to find its first resistance at 0.7746, and a rise through could take it to the next resistance level of 0.7811.

(COZ forex UK)

COZfx: Germany’s producer price inflation accelerates at its fastest pace since November 2011 in February

COZforex: For the past trading session, the EUR declined 0.25% against the USD and closed at 1.0733.

On the data front, Germany’s producer price index rose 3.1% on an annual basis in February, notching its highest level in over five years, amid a surge in energy prices. However, the index fell short of market expectations of a rise of 3.2%, while following a gain of 2.4% in the previous month.

Separately, according to the Bundesbank monthly report, the German economy has continued to expand and will do so in the foreseeable future, on the back of robust industrial output.

In the US, the Chicago Federal Reserve President, Charles Evans, reiterated the Fed’s view that two more interest rate hikes this year are likely and added that the central bank will possibly wait at least until June to decide on the next interest rate hike. Nevertheless, he also added that four rate rises this year isn’t totally out of the realm of possibility, if the economy “really” picks up and inflation tops the Fed’s 2.0% target.

On the data front, the US Chicago Fed national activity index advanced to a level of 0.34 in February, compared to a revised reading of -0.02 in the previous month, whereas investors had envisaged the index to climb to a level of 0.03.

In technical analysis, COZFX strategist Nigel Boynton said: EUR/USD is expected to find support at 1.0722 and a fall through could take it to the next support level of 1.0690; Meanwhile, the pair is expected to find its first resistance at 1.0782, and a rise through could take it to the next resistance level of 1.0810.

Amid no economic releases across the Euro-zone today, market participants will closely monitor comments from a host of Fed officials, scheduled later in the day.

(COZ forex UK)

COZfx: Japan’s flash Nikkei manufacturing PMI declined to a 3-month low level in March

COZforex: For the past trading session, the USD declined 0.24% against the JPY and closed at 111.02.

The Japanese Yen lost ground, after data indicated that Japan’s preliminary Nikkei manufacturing PMI dropped to a level of 52.6 in March, expanding at its slowest pace in three months as growth in new orders and output slowed. The PMI had recorded a level of 53.3 in the previous month.

Early morning data showed that the nation’s final leading economic index came in at 104.9 in January, while the preliminary figures had indicated a revised level of 104.8. Meanwhile, the nation’s final coincident index dropped less than initially estimated to a level of 115.1 in January, after registering a revised reading of 115.5 in the prior month and compared to a fall to a level of 114.9 in the flash print.

In technical analysis, COZFX strategist Nigel Boynton said: USD/JPY is expected to find support at 110.77 and a fall through could take it to the next support level of 110.26; Meanwhile, the pair is expected to find its first resistance at 111.62, and a rise through could take it to the next resistance level of 111.96.

Looking ahead, investors would await Bank of Japan’s summary of opinions report coupled with Japan’s jobless rate, national consumer price index, flash industrial production, retail trade and large retailers’ sales data, all slated to release next week.

(COZ forex UK)

COZfx: Low interest rates needed to help Canada grow: BoC Governor Poloz

COZforex: For the past trading session, the USD slightly rose against the CAD and closed at 1.3381.

Yesterday, the Bank of Canada (BoC) Governor, Stephen Poloz, stated that Canada has a wide room for economic growth and if interest rates are raised now, it will lead the nation into recession.

In the Asian session, the pair is trading at 1.3388, with the USD trading marginally higher against the CAD from yesterday’s close.

In technical analysis, COZ senior foreign exchange risk investment trader Desmond Doyle: USD/CAD is expected to find support at 1.3355 and a fall through could take it to the next support level of 1.3321; Meanwhile, the pair is expected to find its first resistance at 1.3418, and a rise through could take it to the next resistance level of 1.3447.

Amid no economic releases in Canada today, investor sentiment would be governed by global macroeconomic events.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

(COZ forex UK)

COZfx: Australian retail sales surprisingly dropped in February

COZforex: For the past trading session, the AUD declined 0.07% against the USD and closed at 0.7638 on Friday.

In technical analysis, LME Copper prices declined 0.2% or $11.0/MT to $5849.0/MT; Meanwhile, Aluminium prices declined 0.4% or $8.5/MT to $1946.5/MT.

In the Asian session, the pair is trading at 0.7611, with the AUD trading 0.35% lower against the USD from Friday’s close, after Australia’s seasonally adjusted retail sales unexpectedly fell 0.1% in February, defying market expectations for a rise of 0.3% and following a rise of 0.4% in the previous month.

Additionally, the nation’s AIG performance of manufacturing index eased to a level of 57.5 in March, compared to a reading of 59.3 in the prior month. On the other hand, the nation’s seasonally adjusted building approvals recorded an unexpected rise of 8.3% on a monthly basis in February, against market consensus for a drop of 1.0% and following a revised rise of 2.2% in the previous month.

In technical analysis, COZforex senior currency strategist Ian • Quigley said: AUD/USD is expected to find support at 0.7591 and a fall through could take it to the next support level of 0.7572; Meanwhile, the pair is expected to find its first resistance at 0.7646, and a rise through could take it to the next resistance level of 0.7682.

(COZ forex UK)

COZfx: UK’s services PMI touches 3-month high level in March

COZforex: For the past trading session, the GBP rose 0.4% against the USD and closed at 1.2486, after latest data indicated that UK’s service sector activity grew more-than-expected in March.

Britain’s Markit services PMI advanced to a level of 55.0 in March, soaring to its highest level in three months, compared to market consensus of an advance to a level of 53.5, thus easing some worries that the nation’s economy is losing momentum. The PMI had recorded a reading of 53.3 in the prior month.

In the Asian session, the pair is trading at 1.2479, with the GBP trading 0.06% lower against the USD from yesterday’s close.

In technical analysis, COZ senior foreign exchange risk investment trader Desmond Doyle said: GBP/USD is expected to find support at 1.2433 and a fall through could take it to the next support level of 1.2386; Meanwhile, the pair is expected to find its first resistance at 1.2513, and a rise through could take it to the next resistance level of 1.2546.

With no economic releases in Britain today, investor sentiment would be governed by global macroeconomic events.

The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.

(COZ forex UK)

COZfx: Australia’s business conditions index soared to its highest level in 9 years in February

COZforex: For the past trading session, the AUD rose 0.27% against the USD and closed at 0.7511.

In commodities, LME Copper prices declined 0.7% or $39.0/MT to $5731.0/MT; Meanwhile, Aluminium prices declined 0.03% or $0.5/MT to $1929.0/MT.

In the Asian session, the pair is trading at 0.7497, with the AUD trading 0.19% lower against the USD from yesterday’s close.

Earlier in the session, Australia’s NAB business conditions index jumped to a level of 14 in March, surging to its highest level since February 2008 and hinting that the economy could be strengthening. The index registered a level of 9 in the prior month. In contrast, the nation’s NAB business confidence index eased to a level of 6.0 in March, compared to a level of 7.0 in the preceding month.

In technical analysis, coz forex senior derivatives trader Daniel • Moloney said: AUD/USD is expected to find support at 0.7475 and a fall through could take it to the next support level of 0.7453; Meanwhile, the pair is expected to find its first resistance at 0.7516, and a rise through could take it to the next resistance level of 0.7535.

Moving ahead, traders would keep a close watch on Australia’s Westpac consumer confidence index for April, scheduled to release in the early hours’ tomorrow.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

(COZ forex UK)

COZfx: Euro trading higher ahead of Germany’s final inflation figures for March

COZforex: For the past trading session, the EUR rose 0.58% against the USD and closed at 1.0665.

In economic news, Germany’s wholesale price index remained flat on a monthly basis in March, following a revised rise of 0.5% in the prior month.

The greenback tumbled against a basket of currencies, after the US President, Donald Trump, stated that the local currency was getting ‘too strong’.

On the macro front, the US budget deficit widened more-than-anticipated to a level of $176.2 billion in March, compared to market expectations for the nation to post a deficit of $169.0 billion and following a deficit of $108.0 billion in the preceding month. On the contrary, the nation’s mortgage applications rebounded 1.5% in the week ended 07 April, compared to a fall of 1.6% in the previous month.

In technical analysis, COZforex senior currency strategist Ian • Quigley said: EUR/USD is expected to find support at 1.0614 and a fall through could take it to the next support level of 1.0556; Meanwhile, the pair is expected to find its first resistance at 1.0704, and a rise through could take it to the next resistance level of 1.0736.

Going ahead, investors will focus on Germany’s final consumer price index for March, slated to release in a few hours. Additionally, in the US, the flash Reuters/Michigan consumer confidence index for April, coupled with weekly jobless claims data, will be on investor’s radar.

(COZ forex UK)

COZfx: USD/CAD rises to 2-week highs despite geopolitical concerns

COZforex: The US dollar rose to a two-week high against its Canadian counterpart on Wednesday, as the greenback continued to recover from the previous session’s disappointing US data and despite ongoing geopolitical concerns and higher oil prices.

USD/CAD hit 1.3437 during early US trade, the pair’s highest since April 6; the pair subsequently consolidated at 1.3439, gaining 0.43%. In technical analysis, USD/CAD was likely to find support at 1.3309, Tuesday’s low and resistance at 1.3487, the high of March 15.

The greenback recovered from a report by the US Commerce Department on Tuesday saying that housing starts fell in March, likely due to bad weather, while building permits rose.

A separate report showed that U.S. industrial production rose in line with economists’ forecasts in March, while manufacturing production unexpectedly fell.

But sentiment on the greenback remained vulnerable as trade talks between the US and Japan got underway this week, with markets awaiting indications of the direction US trade policy could take under President Donald Trump, who campaigned on a protectionist platform.

(COZ forex UK)

COZfx: AUD trading lower in the morning session

COZforex: For the past trading session, the AUD rose 0.19% against the USD and closed at 0.7567.

On the economic front, in China, Australia’s largest trading partner, the leading economic index rose 0.9% on a monthly basis in March. In the previous month, the index had climbed by a revised 1.3%.

In commodities, LME Copper prices rose 0.2% or $11.0/MT to $5612.0/MT; Meanwhile, Aluminium prices declined 0.2% or $4.5/MT to $1928.0/MT.

In the Asian session, the pair is trading at 0.7559, with the AUD trading 0.11% lower against the USD from yesterday’s close.

In technical analysis, COZforex foreign currency senior currency strategist, Paul Chew said: AUD/USD is expected to find support at 0.7541 and a fall through could take it to the next support level of 0.7522; Meanwhile, the pair is expected to find its first resistance at 0.7581, and a rise through could take it to the next resistance level of 0.7602.

Moving ahead, traders would keep a close watch on a speech by the Reserve Bank of Australia’s (RBA) Governor, Philip Lowe along with the release of Australia’s consumer price index for 1Q, both due tomorrow.

(COZ forex UK)

COZfx: Australia’s private sector credit grew less-than-expected in March

COZforex: For the past trading session, the AUD declined 0.11% against the USD and closed at 0.7466.

LME Copper prices rose 0.2% or $9.0/MT to $5686.5/MT. Aluminium prices declined 0.2% or $3.0/MT to $1954.5/MT.

In the Asian session, the pair is trading at 0.7469, with the AUD trading slightly higher against the USD from yesterday’s close.

Early morning data showed that Australia’s private sector credit rose 0.3% on a monthly basis in March, lower than market expectations for an advance of 0.5%. In the previous month, the private sector credit had registered a similar rise.

In technical analysis, coz forex senior derivatives trader Daniel • Moloney said: AUD/USD is expected to find support at 0.7440 and a fall through could take it to the next support level of 0.7411; Meanwhile, the pair is expected to find its first resistance at 0.7495, and a rise through could take it to the next resistance level of 0.7521.

Going ahead, market participants will await the release of Australia’s AiG performance of manufacturing index for April, slated to release over the weekend.

The currency pair is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

(COZ forex UK)

COZfx: Japanese Yen trading on a weaker footing this morning

COZforex: For the past trading session, the USD rose 0.63% against the JPY and closed at 112.68.

In the Asian session, the pair is trading at 112.77, with the USD trading 0.08% higher against the JPY from yesterday’s close.

In technical analysis, COZ senior foreign exchange risk investment trader Desmond Doyle said: USD/JPY is expected to find support at 112.19 and a fall through could take it to the next support level of 111.61; Meanwhile, the pair is expected to find its first resistance at 113.12, and a rise through could take it to the next resistance level of 113.47.

Amid a holiday on account of Greenery day in Japan today, trading trend in the JPY is expected to be determined by global macroeconomic factors.

The currency pair is trading above its 20 Hr and 50 Hr moving averages.

(COZ forex UK)

COZfx: German exports and imports hit record high level in March

COZforex: For the past trading session, the EUR declined 0.39% against the USD and closed at 1.0880.

On the economic front, Germany’s seasonally adjusted trade surplus widened more-than-expected by €25.4 billion in March, as both exports and imports surged to a record high level, thus pointing towards robust overseas and domestic demand. The nation registered a revised surplus of €20.0 billion in the previous month, while markets expected the nation’s surplus to widen to a level of €21.5 billion. Additionally, the nation’s exports rose more-than-anticipated by 0.4% on a monthly basis in March, compared to a revised rise of 0.9% in the previous month. Further, imports sharply rebounded by 2.4% in March, compared to a drop of 1.6% in the previous month.

On the other hand, the nation’s seasonally adjusted industrial production fell 0.4% in March, lower than market expectations for a fall of 0.7%. Industrial production had registered a revised rise of 1.8% in the prior month.

Macroeconomic data released in the US indicated that JOLTs job openings climbed more-than-expected to a level of 5743.0K in March, compared to a revised reading of 5682.0K in the prior month, while investors had envisaged for a rise to a level of 5725.0K. Moreover, the nation’s final wholesale inventories surprisingly climbed 0.2% in March, compared to a drop of 0.1% in the preliminary print. In the prior month, the wholesale inventories had registered a rise of 0.4%.

In technical analysis, COZFX strategist Nigel Boynton said: EUR/USD is expected to find support at 1.0857 and a fall through could take it to the next support level of 1.0823; Meanwhile, the pair is expected to find its first resistance at 1.0929, and a rise through could take it to the next resistance level of 1.0967.

Going forward, market participants will draw their attention to a speech by the European Central Bank President, Mario Draghi, in Dutch Parliament, scheduled in a few hours. Also, the US monthly budget statement for April and MBA mortgage applications data, slated to release later today, will garner significant amount of market attention.

(COZ forex UK)

COZfx: Bank of England left interest rates unchanged, lowered 2017 growth forecast

COZforex: For the 24 hours to 23:00 GMT, the GBP declined 0.32% against the USD and closed at 1.2888, after the Bank of England trimmed Britain’s 2017 economic growth outlook.

The BoE, at its latest monetary policy meeting, opted to keep its interest rates steady at a record low level of 0.25%, with one member, Kristen Forbes, again voting in favour of an immediate rate hike. Further, the BoE lowered its growth forecast for this year to 1.9% from 2.0%, while raised it for 2018 to 1.7% from 1.6%. Moreover, the bank revised up its inflation forecast, expecting inflation to peak at just below 3.0% in the fourth quarter. In a post meeting statement, the BoE Governor, Mark Carney, warned of a sharper-than-expected squeeze on household income, while also suggested that the central bank could raise rates more sharply than expected if Brexit talks go smoothly and the economy remains stable.

Prior to the monetary policy meeting, the Pound fell against the USD after the latest economic data indicated that the UK economy slowed sharply in the first quarter.

Britain’s industrial production dropped more-than-expected by 0.5% on a monthly basis in March, dropping for a third consecutive month and compared to market expectations for a drop of 0.4%. Industrial production had fallen by a revised 0.8% in the prior month. Further, the nation’s manufacturing production eased 0.6% in March, more than market expectations for a drop of 0.2%. In the prior month, manufacturing production had dropped by a revised 0.3%. Also, construction output unexpectedly eased 0.7% in March, defying market expectations for an advance of 0.4%. In the previous month, construction output had registered a revised drop of 1.3%. Moreover, the nation’s total trade deficit widened more-than-expected to a level of £4.9 billion in March, compared to a revised deficit of £2.7 billion in the previous month.

In other economic news, leading think tanker, NIESR estimated that UK’s gross domestic product advanced 0.2% in the three months to April 2017, whereas investors had envisaged for a rise of 0.4%. In the January-March 2017 period, NIESR estimated GDP had climbed by a revised 0.3%.

In technical analysis, COZforex senior currency strategist Ian • Quigley said: GBP/USD is expected to find support at 1.2838 and a fall through could take it to the next support level of 1.2792; Meanwhile, the pair is expected to find its first resistance at 1.2939, and a rise through could take it to the next resistance level of 1.2994.

(COZ forex UK)

COZfx: Canadian dollar hits 3-week highs against weaker greenback

COZforex: The Canadian dollar rose to the highest levels in three weeks against its broadly weaker US counterpart on Tuesday as fresh concerns over the Trump administration and a slate of mixed US economic reports pressured the greenback.

USD/CAD was down 0.18% to 1.36108 by 09.30 ET, not far from a session low of 1.3598, the weakest level since April 27.

The greenback weakened across the board following reports that US President Donald Trump shared sensitive intelligence obtained from a close US ally with Russia's foreign minister about an Islamic State operation in a meeting last week.

The report came as Trump's administration reels over his decision to sack former FBI Director James Comey and amid congressional calls for an independent investigation of possible Russian interference with the US election.

The report underlined doubts over Trump’s ability to successfully push through his economic stimulus program.

The dollar came under additional selling pressure after data showing that US housing starts slowed unexpectedly in April pointed to a slowdown the housing market recovery.

Housing starts fell by 2.6% to a seasonally adjusted annual rate of 1.17 million units, the Commerce Department said. It was the lowest since November and added to a recent run of disappointing US economic data. Building permits fell by 2.5% the report said.

The loonie remained supported as prices of oil, a major Canadian export, rose on Tuesday amid hopes for an extension of a supply cut deal aimed at reducing a global supply glut.

(COZ forex UK)

COZfx: Australia’s unemployment rate surprisingly declined to a 4-month low level in April

COZforex: For the past trading session, the AUD rose 0.07% against the USD and closed at 0.7433.

In commodities, LME Copper prices declined 0.2% or $9.0/MT to $5575.0/MT; Meanwhile, Aluminium prices rose 0.7% or $13.0/MT to $1928.0/MT.

In the Asian session, the pair is trading at 0.7453, with the AUD trading 0.27% higher against the USD from yesterday’s close, following upbeat Australian jobs report.

Data revealed that Australia’s seasonally adjusted unemployment rate registered an unexpected drop to 5.7% in April, dipping to a four-month low level, suggesting that the nation’s labour market is strengthening, despite a slowdown in economic growth. Meanwhile, investors had envisaged the unemployment rate to remain steady at 5.9%. Additionally, the nation’s consumer inflation expectations dropped to 4.0% in May, compared to a level of 4.1% in the previous month.

Elsewhere, in China, Australia’s largest trading partner, the house price index climbed 10.7% on an annual basis in April, after recording a rise of 11.3% in the previous month.

In technical analysis, COZforex foreign currency senior currency strategist, Paul Chew said: AUD/USD is expected to find support at 0.7406 and a fall through could take it to the next support level of 0.7359; Meanwhile, the pair is expected to find its first resistance at 0.7479, and a rise through could take it to the next resistance level of 0.7505.

(COZ forex UK)

COZfx: Japanese Yen trading lower in the Asian session

COZforex: For the past trading session, the USD declined 0.3% against the JPY and closed at 111.15 on Friday.

Over the weekend, macro data indicated that Japan’s Merchandise total trade balance narrowed more than expected to ¥481.7 billion in April, from ¥614.7 billion reported in the previous month. Markets expected the figures to decrease to ¥520.7 billion. Moreover, the nation’s exports jumped 7.5% in April, less than analysts’ expectations of 8.0% gain, helped by strong demand in Asia for semiconductors, semiconductor-making equipment and steel. Exports had risen 12.0% in the prior month. On the other hand, imports rose 15.1%, more than expectations of 14.8% rise, after recording a 15.8% growth in the previous month.

In technical analysis, coz forex senior derivatives trader Daniel • Moloney said: USD/JPY is expected to find support at 111.08 and a fall through could take it to the next support level of 110.72; Meanwhile, the pair is expected to find its first resistance at 111.75, and a rise through could take it to the next resistance level of 112.06.

Going forward, traders will keep a close eye on preliminary reading of Japan’s Nikkei manufacturing PMI data for May, slated to release overnight, to gauge strength in the nation’s manufacturing sector.

(COZ forex UK)

COZfx: German consumer confidence rose for a consecutive second month for June

COZforex: For the past trading session, the EUR rose 0.32% against the USD and closed at 1.1222, after Germany’s GfK consumer confidence index unexpectedly climbed to a level of 10.4 for June, on the back of further improvement in expectations on income and economy, following a reading of 10.2 in the previous month. Investors had expected the index to remain unchanged.

Meanwhile, the European Central Bank President, Mario Draghi, hinted that there would be no changes to monetary policy at its upcoming meeting on 8 June 2017. He further stated that monetary policy would stay very supportive of borrowing and investment for some time. Moreover, the central bank ruled out the possibility that Brexit could pose a major risk to the Euro zone economy.

Separately, in its semi-annual Financial Stability Review, the central bank stated that recent increase in yields and political uncertainties in some nations have raised fresh concerns over debt-sustainability in the last six months.

In the US, the latest FOMC minutes signalled that policymakers could raise interest rates “soon” and supported a plan to gradually shrink the Federal Reserve’s $4.5 trillion balance sheet. However, the central bankers added that it would be prudent to wait for additional data to check whether recent slowdown in economic growth is temporary or not.

In other data, the US existing home sales declined 2.3% in April to an annual rate of 5.57 million units, against market expectations for a 1.1% drop. In the prior month, existing homes sales had risen 4.2% to an annual rate of 5.70 million. Moreover, the US mortgage applications rose 4.4% on a monthly basis during the week ended 19 May, from a 4.1% drop reported in the previous week.

In technical analysis, COZFX strategist Nigel Boynton said: EUR/USD is expected to find support at 1.1193 and a fall through could take it to the next support level of 1.1145; Meanwhile, the pair is expected to find its first resistance at 1.1264, and a rise through could take it to the next resistance level of 1.1287.

Ahead in the day, market participants would keenly await the release of the US advance goods trade balance for April and initial jobless claims for the week ended 20 May, for further direction in the currency pair.

(COZ forex UK)

COZfx: UK’s economy expanded more slowly than expected in the first quarter

COZforex: For the past trading session, the GBP declined 0.31% against the USD and closed at 1.2931, after macroeconomic data showed that UK’s economic growth in the first quarter was slower than previously estimated, raising concerns about the health of the UK economy ahead of general election on 8 June and the start of Brexit negotiations with the EU.

The nation’s gross domestic product was revised down to 0.2% in the three months to March 2017, recording its weakest pace of growth since the first quarter of 2016, from the prior estimate of 0.3% growth, as rising inflation took its toll on consumer spending. The GDP had recorded a rise of 0.7% in the prior quarter.

Additionally, the number of mortgage approvals in the UK declined to 40.75K in April, compared to a revised level of 40.87K reported in the previous month. Markets were expecting mortgage approvals to ease to 40.80K.

In technical analysis, COZFX strategist Nigel Boynton said: GBP/USD is expected to find support at 1.2832 and a fall through could take it to the next support level of 1.2777; Meanwhile, the pair is expected to find its first resistance at 1.2979, and a rise through could take it to the next resistance level of 1.3071.

Going ahead, investors will look forward to the Markit manufacturing and construction PMI data, GfK consumer confidence index and mortgage approvals for the UK, all due for release next week.

(COZ forex UK)

COZfx: Swiss ZEW economic sentiment index advanced in May

COZforex: For the past trading session, the USD declined 0.81% against the CHF and closed at 0.9679.

Macroeconomic data indicated that Switzerland’s ZEW economic expectations index registered a rise to a level of 30.8 in May, after recording a reading of 22.2 in the prior month. Further, the nation’s UBS consumption indicator rose to a level of 1.48 in April. In the previous month, UBS consumption indicator had recorded a revised reading of 1.44.

In the Asian session, the pair is trading at 0.9683, with the USD trading a tad higher against the CHF from yesterday’s close.

In technical analysis, COZforex foreign currency senior currency strategist, Paul Chew said: USD/CHF is predicted to find support at 0.9648 and a fall through could take it to the next support level of 0.9614; Meanwhile, the pair is expected to find its first resistance at 0.9739, and a rise through could take it to the next resistance level of 0.9796.

Ahead in the day, all eyes will be on Switzerland’s 1Q GDP numbers, retail sales for April and SVME–PMI for May.

The currency pair is trading below its 20 Hr and 50 Hr moving averages.

(COZ forex UK)

COZfx: Canadian dollar little changed as oil prices drift lower

COZforex: The Canadian dollar was almost unchanged against its US counterpart on Tuesday as investors shrugged off weakness in oil prices as they awaited remarks by Bank of Canada Governor Stephen Poloz and other looming risk event later in the week.

USD/CAD was trading at 1.3469 by 09.44 ET, almost unchanged for the day.

Prices for oil, one of Canada’s major exports, were lower for the third day in a row amid fears that a political rift between Qatar and several Arab states, including Saudi Arabia, could undermine an OPEC-led push to curb a global supply glut.

Investors remained wary ahead of the Bank of Canada’s financial system review, set for Thursday, which was to be followed by a press conference with Poloz.

Investors are keen to hear the central bank’s assessment of the health of the housing and mortgage market in light of a recent run on deposits at embattled alternative mortgage lender Home Capital.

Data on Monday showed that new listings of Toronto homes surged in May from a year earlier, while sales dropped sharply and price gains moderated in the wake of new housing rules aimed at cooling the housing market in Canada's largest city.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.19% at 96.59 after falling to an overnight low of 96.49, the lowest level since November 8.

(COZ forex UK)

COZfx: Aussie trading lower in the Asian session

COZforex: For the past trading session, the AUD declined 0.07% against the USD and closed at 0.7529 on Friday.

In commodities, LME Copper prices rose 1.6% or $91.5/MT to $5739.0/MT; Meanwhile, Aluminium prices declined 0.05% or $1.0/MT to $1901.5/MT.

In the Asian session, the pair is trading at 0.7525, with the AUD trading slightly lower against the USD from Friday’s close.

In technical analysis, COZforex foreign currency senior currency strategist, Paul Chew said: AUD/USD is expected to find support at 0.7516 and a fall through could take it to the next support level of 0.7507; Meanwhile, the pair is expected to find its first resistance at 0.7538, and a rise through could take it to the next resistance level of 0.7551.

With a public holiday being observed in Australia today, investor sentiment would be governed by global macroeconomic factors.

The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.

(COZ forex UK)

COZfx: Yen holds weaker ahead of Bank of Japan with policy seen steady

COZforex: The yen held weaker on Friday in early Asia as the Bank of Japan gets set to release it latest policy views.

USD/JPY changed hands at 110.07, up 0.13%, while AUD/USD traded at 0.7596, up 0.21%. GBP/USD rose 0.11% to 1.2711.

The USD index, which measures the greenback’s strength against a trade-weighted basket of 6 major currencies, eased 0.05% to 97.45.

Later in Asia, the Bank of Japan is expected to affirm efforts to buy assets at ¥80 trillion annually.

"The overarching question is not so much what else the BOJ may do, as it is what’s left for the BOJ to exploit in the toolbox, and the triggers to act," Mizuho said in a note to clients on Friday ahead of the announcement.

"On one hand, Governor Kuroda is acutely aware and has been articulating that inflation is a long way off the 2% target and lacks “escape velocity” as it. On the other, he has been under pressure from lawmakers to account for the record size of the BOJ’s balance sheet – now around JPY 500 trillion; which corresponds to increasing costs of stimulus."

"Bridging the gap is an exercise in delicate balance – much ado about nothing much may be the optimal state of play. And if this reticence is construed as dovish accommodation, USD/JPY may be poised to extend gains above 111 as markets digest a hawkish Fed.

(COZ forex UK)