FX Flows

From the FXWW Chatroom: EurUsd opened 1.0790/1.0805, started grinding higher positive news out of Europe. First was on France where BVA poll showed that Emmanuel Macron is set to win the first round of the French general election in four weeks’ time. Then Reuters News reported that 9 lawmakers from Far-Right said they will back Macron. The weekend also saw German Chancellor Angela Merkel’s party winning the elections in the western state of Saarland.

We saw two European names purchasing EurUsd up to the 1.0840’s. EurUsd had another test of topside, printing 1.08495 where we saw thick offers at 1.0850 in the machine. Weak Usd supported the EurUsd – we chewed a chunk of offers at 1.0850 and that was the high. I suspect there are some stops in EurUsd thereafter 50 and next big resistance is 1.0882, the 200-Day SMA; also 1.0884 was previous high back in Dec 2016.

UsdJpy opened up at 111.20, filled the high of 111.25 then sold down to 110.72 in very illiquid market. I suspect stops were taken out when we traded subsequently to 110.43. Usd declined into the Tokyo fix. I am told there are bids closer to 110.00-10 out of Japan, suspect they are from the “Dark Lord”.

EurGbp popped along with EurUsd on back of Merkel news. This kept the GbpUsd suppressed. Sales of UsdJpy provided some help to the GbpUsd, lifted the pair back on to 1.25-handle. Break above 1.2540 will see small trigger of stop buy orders.
Usd weakness and then AudNzd sold helped prop up the NzdUsd. High was 0.7051 and resistance seen at 0.7052.

While most currency benefitted from weak Usd, Aud is the one that didn’t. The AudUsd opened at 0.7610/38, peaked at 0.7638 then slipped when AudNzd selling came about. Suspect there were stop sell orders below 1.0830. The cross reached low of 1.0809. AudUsd got to 0.7610 and stalled there. Chatter of exporters at 0.7600-10 but Iron Ore futures are down 6% and SHFE Steel Rebar Oct contract down more than 3.5%.

UsdCad paid no attention to oil price. Crude May contract fell below $48 while UsdCad traded lower from 1.33550 down to 1.3320’s.

Keep watch on North Korea. The North Korean People’s Army issued a statement on Sunday threatening a pre-emptive strike in response to South Korean and US special operations troops’ recent drills for incapacitating Pyongyang’s leadership in case of conflict.

(CIBC)
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